Chemours (NYSE:CC) Shares Gap Down After Earnings Miss

Key Points

• Chemours shares fell sharply after second-quarter adjusted EPS came in at $0.42 versus the $0.50 analyst consensus, while revenue of $1.59 billion also missed expectations of $1.65 billion. Revenue declined roughly 1.5% year over year.
• Litigation expenses and lower adjusted EBITDA weighed on results, although the company generated $158 million in operating cash flow and cited data-center demand as a growth opportunity. Chemours maintained its full-year outlook for 1%–5% sales growth and $775 million–$825 million in adjusted EBITDA.
• The board declared a quarterly dividend of $0.0875 per share, or $0.35 annualized, representing an indicated yield of about 2.3%; shares of record on August 14 are scheduled to be paid on September 15.

The Chemours Company (NYSE:CC - Get Free Report) gapped down before the market opened on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $17.93, but opened at $16.01. Chemours shares last traded at $14.94, with a volume of 1,057,830 shares.

The specialty chemicals company reported $0.42 EPS for the quarter, missing the consensus estimate of $0.50 by ($0.08). Chemours had a negative net margin of 6.82% and a positive return on equity of 52.49%. The firm had revenue of $1.59 billion for the quarter, compared to analysts' expectations of $1.65 billion. During the same period in the prior year, the business posted ($2.54) EPS. The business's quarterly revenue was down 1.5% compared to the same quarter last year.

Chemours Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, September 15th. Shareholders of record on Friday, August 14th will be paid a dividend of $0.0875 per share. This represents a $0.35 dividend on an annualized basis and a yield of 2.3%. The ex-dividend date is Friday, August 14th. Chemours's dividend payout ratio (DPR) is currently -13.26%.

Key Chemours News

Here are the key news stories impacting Chemours this week:

• Positive Sentiment: Chemours reported a second-quarter adjusted profit of $0.42 per share, a significant improvement from the $2.53 per-share loss reported in the year-ago quarter. The company also generated $158 million in operating cash flow and $114 million in free cash flow. Chemours Second Quarter Results
• Positive Sentiment: Titanium Technologies sales increased 1% year over year to $661 million, while management highlighted growth opportunities tied to data-center applications. Full-year expectations remain intact for 1% to 5% sales growth and adjusted EBITDA of $775 million to $825 million. Chemours Data Center Growth and Litigation
• Positive Sentiment: The board declared a quarterly dividend of $0.0875 per share, payable September 15 to shareholders of record August 14. The payment represents an annualized dividend of $0.35 and an indicated yield of approximately 2%. Chemours Third Quarter Dividend
• Neutral Sentiment: Third-quarter revenue guidance of $1.5 billion to $1.6 billion and full-year guidance of $5.9 billion to $6.1 billion are broadly near Wall Street expectations, offering limited new upside or downside from the outlook.
• Neutral Sentiment: Recent institutional activity was mixed, with some funds adding shares while major investors including BlackRock and Fidelity reduced their positions.
• Negative Sentiment: Second-quarter adjusted EPS of $0.42 and revenue of $1.59 billion missed analyst estimates of approximately $0.50 and $1.65 billion, respectively. Revenue declined about 1% year over year, and adjusted EBITDA fell to $247 million from $260 million. Chemours Misses Q2 Estimates
• Negative Sentiment: Litigation expenses weighed on results and overshadowed otherwise favorable data-center demand. Chemours also carried approximately $3.9 billion of gross debt at quarter-end, keeping leverage and legal liabilities as important risks for investors.

Analyst Ratings Changes

A number of equities analysts recently weighed in on the stock. Morgan Stanley boosted their price objective on shares of Chemours from $17.00 to $21.00 and gave the stock an "equal weight" rating in a report on Monday, May 11th. Royal Bank Of Canada lifted their target price on Chemours from $26.00 to $29.00 and gave the stock an "outperform" rating in a report on Monday, May 11th. Alembic Global Advisors reaffirmed an "overweight" rating and set a $30.00 price target on shares of Chemours in a report on Wednesday, May 13th. JPMorgan Chase & Co. increased their price objective on Chemours from $17.00 to $22.00 and gave the company a "neutral" rating in a research report on Thursday, May 21st. Finally, Mizuho set a $22.00 price objective on Chemours in a report on Wednesday. One research analyst has rated the stock with a Strong Buy rating, six have given a Buy rating, four have given a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, Chemours has a consensus rating of "Moderate Buy" and a consensus target price of $23.80.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in the stock. Baird Financial Group Inc. purchased a new stake in Chemours during the 1st quarter valued at approximately $148,000. Royal Bank of Canada boosted its position in shares of Chemours by 6.8% during the first quarter. Royal Bank of Canada now owns 585,702 shares of the specialty chemicals company's stock worth $7,926,000 after acquiring an additional 37,382 shares during the last quarter. AQR Capital Management LLC bought a new position in shares of Chemours during the first quarter worth $161,000. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its stake in Chemours by 149.3% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 43,243 shares of the specialty chemicals company's stock valued at $593,000 after acquiring an additional 25,899 shares in the last quarter. Finally, Empowered Funds LLC purchased a new position in Chemours during the first quarter valued at $403,000. 76.26% of the stock is currently owned by institutional investors.

Chemours Stock Performance

The company has a market capitalization of $2.27 billion, a P/E ratio of -5.71 and a beta of 1.43. The company has a debt-to-equity ratio of 18.98, a quick ratio of 0.87 and a current ratio of 1.82. The business's fifty day simple moving average is $19.67 and its 200-day simple moving average is $20.06.

Chemours Company Profile

Chemours Company, established in 2015 as a spin-off from E. I. du Pont de Nemours and Company, is a global chemistry organization headquartered in Wilmington, Delaware. Since its formation, Chemours has focused on delivering performance chemicals that help customers lower their carbon footprint, increase energy efficiency and conserve water. The company operates with a commitment to safety, environmental stewardship and innovation.

Chemours' principal business activities are organized into three core segments.

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