Chemours (CC) To Post Q4 Earnings: What's In The Cards?

The Chemours Company (NYSE:CC) is set to release fourth-quarter 2018 results on Feb 14, after the closing bell.

In the last reported quarter, Chemours delivered positive earnings surprise of 8%. The company’s adjusted earnings per share (EPS) were $1.49, which beat the Zacks Consensus Estimate of $1.38.

Net sales rose around 3% year over year to $1,628 million. However, the figure trailed the Zacks Consensus Estimate of $1,715.8 million.

Notably, Chemours has outpaced the Zacks Consensus Estimate each of the trailing four quarters, with average positive earnings surprise of 14.9%.

The stock lost around 22.6% in the past year compared with the industry's 21.5% decline.

Let’s see how things are shaping up for this announcement.

Factors at Play in Q4

In November 2018, Chemours stated that it expects adjusted EPS within the upper-half of the $5.10-$5.85 range. Adjusted EBITDA is projected within the lower half of the company’s original guidance of $1.70-$1.85 billion. Free cash flow is expected to be roughly $650 million for 2018.

Notably, the Zacks Consensus Estimate for fourth-quarter consolidated sales is currently pegged at $1,547 million, reflecting an expected decline of 1.8% year over year.

The company expects each of the segments to deliver solid year-over-year bottom- and top-line growth.

For Fluoroproducts, Chemours expects results to gain from the continued adoption of Opteon refrigerants and strong demand for fluoropolymers products. Revenues in the Fluoroproducts segment rose 7% year over year in the third quarter on the back of broad-based demand for Opteon and base refrigerants as well as fluoropolymer products.

Chemical Solutions unit is projected to consistently deliver improved performance driven by strong demand for mining solutions products. The segment is benefiting from broad-based price increases across mining solutions and performance chemicals as well as intermediates business lines.

The company expects the Titanium Technologies segment to witness year-over-year improvement, despite expected volume loss due to customer destocking.

Chemours is witnessing pressure on volumes in Titanium Technologies due to customer destocking across its end markets. The company expects the trend of softer demand to persist through the fourth quarter.

For full-year 2018, Chemours sees persistent volume declines with customer destocking across all end markets. The is likely to lead to a mid-single digit decline in volume on a year-over-year basis. Local prices are expected to be stable.

Earnings Whispers

Our proven model does not show that Chemours is likely to beat estimates this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:

Earnings ESP: Earnings ESP for Chemours is -0.48%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are currently at $1.04 and $1.05, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Chemours currently carries a Zacks Rank #4 (Sell). Note that we caution against stocks with a Zacks Rank #4 or #5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks Poised to Beat Estimates

Here are some companies in the same space you may want to consider as our model shows that they also have the right combination of elements to post an earnings beat this quarter:

Eldorado Gold Corp. (NYSE:EGO) has an Earnings ESP of +9.48% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

New Gold Inc (NYSE:NGD) has an Earnings ESP of +100.00% and carries a Zacks Rank #3.

Hecla Mining Co. (NYSE:HL) has an Earnings ESP of +14.29% and carries a Zacks Rank #3.

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