Chemours Co (NYSE:CC) Soars On Transformation Initiatives


In the words of Chemours Co (NYSE:CC) President and CEO Mark Vergnano, transformation initiatives are pervasive throughout the company.

That certainly looks right, because quarter-by-quarter, Chemours is banishing the ghosts from its DuPont past. The third quarter (see below) is a deserving case in point – clearly its most successful quarter since Chemours struck out on its own.

It’s not just the earnings numbers, either. A look at the technical picture, and the monthly chart, shows the magnitude of the transformation.

From the June 2015 high of $20.92, Chemours Co (NYSE:CC) fell all the way to a low of $3.03 in January 2016 – that’s a loss of nearly 86% in seven months. But thereafter, Chemours veered around and headed right in the other direction (up).

On Monday, the stock closed at $19.28, up 12.75%, on volume of a sizable 21.14 million.

So, within 10 months the stock is back within handshaking distance of where it was in June 2015. That’s certainly some turnaround.

(Not that it didn’t get some help from DuPont, but still…)

Chemours Co (NYSE:CC)’s third quarter

Chemours is a chemical company operating in the segments of titanium technologies, fluoro-products and chemical solutions.

For the third quarter it reported EPS of $0.61 which beat by $0.27 and revenue of $1.4 billion which missed by $10 million and was down 6% year on year, mostly due to the sale of certain businesses.

Vergnano said, “We continue to make excellent progress on all aspects of our transformation plan, realizing an incremental $60 million of cost savings during the quarter. We are benefiting from the Opteon refrigerant ramp up and the expansion of our low-cost TiO2 capacity at Altamira, while at the same time, delivering our planned cost reductions.”

Chemours was able to boost cash generation from operating activities by $440 million (for nine months) and by October 31, had reduced long term debt by $315 million.

It will save about $19 million annually on interest payments as a result of the debt repayment.

However, net of cash, Chemours still had a debt load of $2.8 billion as at September 30.

Chemours Co (NYSE:CC)’s outlook

For the full-year 2016 the company expects adjusted EBITDA to be between $740 million and $775 million.


Leave A Reply