Chemours is a chemical company in the titanium technologies, fluoroproducts and chemical solutions areas. Its ingredients are found in plastics and coatings, refrigeration and air conditioning, mining and oil refining operations and general industrial manufacturing.
It was spun-off from DuPont in 2015. The company has 35 manufacturing facilities around the globe.
Big Beat in the Second Quarter
On Aug 8, Chemours reported its second quarter results and beat the Zacks Consensus Estimate by 14 cents. EArnings were $0.27 compared to the $0.13 estimate.
Net sales fell 8% to $1.4 billion, but the company tightened its business model as part of the Five-Point Transformation Plan.
It sold its Sulfur business for $325 million and also announced the sale of its Clean and Disinfect business for $230 million.
Titanium Technologies sales fell 7% year over year, but it saw strong demand in North America and EMEA which was offset by weaker volumes in Asia and Latin America.
As part of the Transformation Plan, it is getting a better handle on the balance sheet. It reduced debt by $100 million year-to-date.
Estimates Rise for 2016 and 2017
Given the big beat and more upbeat outlook, the analysts raised both 2016 and 2017 earnings estimates.
The 2016 Zacks Consensus Estimate jumped to $0.77 from $0.63 over the last month.
Although, that’s still negative earnings growth because it made $0.79 in 2015.
But analysts expect an explosion of growth in 2017, with the 2017 earnings estimate rising to $1.27 from $1.10 over the last 30 days. That is earnings growth of 64.5%.
Shares on a Wild Ride
Shares did nothing but go down after the initial spin-off but they appear to have bottomed during the dark times of January/February 2016.
Since then, they’ve spiked higher. They’re no longer cheap, with a forward P/E of 16.4.
Shareholders are rewarded with a dividend of 1% for their patience.
For investors looking for a chemical play with the possibility of big future earnings growth, Chemours should be on the short list.
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