Kronos Worldwide (KRO) Up 24% in 3 Months: What's Driving It?

  • 13/10/2017
Kronos Worldwide (KRO) Up 24% in 3 Months: What's Driving It?
Shares of chemical maker, Kronos Worldwide, Inc. KRO have rallied around 24% over the last three months. The company has also outperformed its industrys gain of roughly 7.8% over the same time frame.

Kronos Worldwide has a market cap of roughly $2.9 billion and average volume of shares traded in the last three months is around 492.7K. The company has expected long-term earnings per share growth of around 5%.

Lets take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.

Strong second-quarter 2017 results and upbeat outlook have contributed to the rally in Kronos Worldwides shares. The company witnessed a significant rise in profits in the second quarter on the back of favorable impacts of improved selling prices, increased sales and production volumes and reduced raw materials and other production costs. It recorded profits of $196.5 million or $1.70 per share in the quarter compared with $1.7 million or a penny per share a year ago.

Net revenues also jumped around 24% year over year to $441.4 million in the second quarter on the back of higher titanium dioxide (TiO2) selling prices and increased sales volumes. TiO2 sales volumes were driven by higher sales in the European and North American markets.

Kronos Worldwide saw strong sales volumes during first-half 2017. It is witnessing improved demand for TiO2 products in some of its key markets. Kronos Worldwide also saw higher selling prices during the first half, driven by its successful implementation of price hikes.

Kronos Worldwide also provided an upbeat guidance for 2017. The company, during its second-quarter call, announced that it expects production volumes to be higher in 2017 on a year-over-year basis as production rates this year will be favorably impacted by the implementation of certain productivity-enhancing improvement projects at some facilities.

The company also sees income from operations in 2017 to be higher on a year-over-year basis, mainly due to an expected increase in average selling prices and the favorable impact of anticipated higher production volumes in 2017.

Other Stocks to Consider

Other stocks in the basic materials space worth considering include Ingevity Corporation NGVT, The Chemours Company CC and FMC Corporation FMC, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of todays Zacks #1 Rank stocks here.

FMC has expected earnings growth of 11.3% for the current year.

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