Kronos Worldwide's Earnings Surpass Estimates in Q3, Sales Lag

Core Viewpoint - Kronos Worldwide, Inc. (KRO) reported a significant improvement in earnings for the third quarter of 2024, with earnings per share (EPS) of 62 cents, compared to a loss of 18 cents in the same quarter last year, exceeding the Zacks Consensus Estimate of 34 cents [1][2]. Financial Performance - Net sales increased approximately 22% year over year to $484.7 million, driven by higher sales volumes due to stronger demand for titanium dioxide (TiO2), although this was partially offset by lower average TiO2 selling prices. However, the sales figure fell short of the Zacks Consensus Estimate of$588.6 million [2]. - TiO2 production volumes rose 37% year over year to 141 thousand metric tons, while TiO2 sales volumes increased 21% to 130 thousand metric tons. The average selling prices for TiO2 decreased by 1% year over year [3]. - The TiO2 segment profit was $43.4 million, a turnaround from a segment loss of$21.4 million in the previous year, primarily due to improved operational income from increased sales and production volumes, alongside lower production costs [4]. Financial Position - At the end of the quarter, the company had cash and cash equivalents of $94.8 million, reflecting a decrease of approximately 29$470.4 million [5]. Market Outlook - Customer demand moderated during the third quarter compared to the first half of the year across all major markets, with expectations of further weakening in demand for the fourth quarter. However, the company anticipates that sales volumes for 2024 will exceed those of 2023, based on improved demand observed in the first nine months of the year [6]. - KRO expects higher year-over-year operating results for 2024, considering improved demand, modest increases in selling prices, and lower production costs [7]. Stock Performance - Shares of Kronos have increased by 76.1% over the past year, significantly outperforming the Zacks Chemicals Diversified industry's rise of 9.9% [8].