Kronos Worldwide, Inc. KRO logged a profit of $18.6 million or 16 cents per share in second-quarter 2020, down from $29.5 million or 25 cents per share in the year-ago quarter. Earnings, however, beat the Zacks Consensus Estimate of 4 cents.
The bottom line in the reported quarter was impacted by lower sales volumes, lower average titanium dioxide (TiO2) selling prices, increased raw materials and other production costs.
Net sales fell 20% year over year to $386 million, hurt by lower sales volumes and lower average TiO2 selling prices. However, the figure beat the Zacks Consensus Estimate of $369.9 million.
Kronos Worldwide Inc Price, Consensus and EPS Surprise
Volumes and Pricing
The company’s TiO2 sales volumes fell 22% year over year due to lower volumes in all major markets mainly on account of lower demand associated with the coronavirus pandemic. TiO2 production volumes were down 2% year over year in the reported quarter.
Average TiO2 selling prices were down 1% year over year in the reported quarter.
Financials
Kronos Worldwide ended the quarter with cash and cash equivalents of $341.4 million, up 3.9% year over year. Long-term debt was $445 million, down 1.6% year over year.
Net cash provided by operating activities was $18.1 million for the six months ended Jun 30, 2020.
Outlook
Kronos Worldwide said that the coronavirus pandemic impacted its operations through lower demand for the products, resulting in reduced sales and earnings for the second quarter.
The company expects the U.S. and global gross domestic product to be considerably impacted for an indeterminate period. Factoring in the impacts of the pandemic on the world economy, it envisions its sales volumes and earnings to be lower than the prior periods for the balance of 2020.
Price Performance
Shares of Kronos Worldwide have lost 1.2% in the past year compared with a 0.7% decline of the industry.
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Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Harmony Gold Mining Company Limited HMY, Equinox Gold Corp. EQX and Royal Gold, Inc. RGLD.
Harmony Gold has a projected earnings growth rate of 264.3% for the current year. The stock has gained around 125% in a year. It currently has a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Equinox Gold has a projected earnings growth rate of 255.2% for the current year. The company’s shares have gained around 111% in a year. It currently has a Zacks Rank #2.
Royal Gold has an expected earnings growth rate of 62.1% for 2020. The company’s shares have rallied 17.3% in the past year.It is presently a Zacks #2 Ranked player.
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