Personal Finance
CC

Here's Why Chemours Co. Gained as Much as 11.4% Today

A businessman drawing a yellow step chart with a positive trajectory

What happened

Shares of The Chemours Company (NYSE: CC) jumped over 11% today after the specialty chemicals manufacturer announced second-quarter and first-half 2018 earnings results. The company delivered strong top- and bottom-line growth compared to the year-ago period, on strong pricing gains for its core offerings in refrigerants, fluoroproducts, and titanium dioxide.

While the company actually just missed Wall Street expectations for revenue during the most recent quarter ($1.82 billion expected vs. $1.80 billion actual), the business smoked expectations for adjusted earnings per share ($1.59 expected vs. $1.79 actual), according to numbers compiled by Yahoo! Finance. Either way, it was difficult to complain about a 75% increase in net income compared to the prior-year period.

As of 2:09 p.m. EDT, the stock had settled to a 5.5% gain.

A businessman drawing a yellow step chart with a positive trajectory

Image source: Getty Images.

So what

Management delivered plenty of good news to shareholders when discussing second-quarter 2018 earnings results . Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the fluoroproducts segment increased 17% year over year, while the titanium technologies segment delivered a 53% improvement in that span. That helped to drive significant growth for the overall business in the first half of the year, compared to the same period of 2017:

Metric First Half 2018 First Half 2017 Year-over-Year Change
Total revenue $3.54 billion $3.02 billion 17%
Gross profit $1.09 billion $794 million 38%
Net income $579 million $312 million 86%
Operating cash flow $539 million $225 million 140%

Data source: Chemours press release.

In addition to the actual business growth, CFO Mark Newman said that the expectation is to return nearly all free cash flow between now and the end of 2020 to shareholders. It will do this via share repurchases, and via an increase in the dividend, which now yields 1.5%.

Now what

The strong results from the first half of 2018 provide reasons for optimism for long-term shareholders. After an incredible rise from its initial public offering in 2015, Chemours stock has moved sideways in the last year, with a fair share of volatility in that span. If the business can continue to ride the momentum in core markets, deliver strong cash flow in future periods, and gradually reduce its debt balance, then the company will be on its way to earning a higher market valuation over time.

10 stocks we like better than Chemours

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Chemours wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of June 4, 2018

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

CC

Other Topics

Stocks

Latest Personal Finance Videos

    #TradeTalks: The Changing E-Commerce Landscape

    e-Commerce Consultant James Thomson joins Jill Malandrino on Nasdaq #TradeTalks to discuss the changing e-commerce landscape, what consumers should prepare for as we head into shopping season and why you shouldn’t do last minute shipping.

    Oct 23, 2020

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More