Chemours Company Reports Double Digit Growth; Why are Insiders Selling?

09:06 08/08/2018

Just last week, on August 2nd, The Chemours Company CC , a global chemistry company with leading market positions in fluoroproducts, chemical solutions and titanium technologies, announced its financial results for the second quarter 2018.

The Company reported net Sales of $1.8 billion, up 14%, net Income of $281 million, up 75% with EPS of $1.53, up 82%, and adjusted Net Income of $314 million, up 91% with Adjusted EPS of $1.71, up 99%.

"Our performance this quarter was truly a team effort, resulting in broad-based growth across our segments," said President and CEO Mark Vergnano. "Continued momentum in Opteon™ refrigerants adoption, increased price and sustained demand for our Fluoropolymers products, higher average global prices for Ti-Pure™ pigment, and demand for our Mining Solutions products led to double-digit growth across our key financial metrics.”

Now some critics are wondering why Chemours Company CC , President and Chief Executive Officer, Mark Vergnano, and five other executives with the firm, sold $6M worth of shares in the company.

Second quarter net sales rose 14 percent from the prior year quarter to $1.8 billion, driven by volume growth in Fluoroproducts and Chemical Solutions, and higher global average selling prices in Titanium Technologies and Fluoroproducts. Second quarter net income was $281 million, or $1.53 per diluted share, up 75 percent and 82 percent, respectively. Net income in the quarter reflects the impact of extinguishment of debt and refinancing actions taken during the second quarter of 2018. Adjusted EBITDA for the second quarter 2018 increased 38 percent to $497 million.

This improvement was primarily a result of increased sales partially offset by higher distribution and raw material costs.

The Board of Directors of Chemours (NYSE:CC) CC  declared a quarterly cash dividend of $0.25 per share on the company's common stock for the third quarter of 2018, a 47 percent increase per share from the previous level of $0.17 per share. The dividend will be paid on September 14, 2018 to stockholders of record as of the close of business on August 17, 2018.

"Chemours is committed to the capital allocation priorities set forth at our December investor day, including returning higher levels of cash to shareholders," said Chemours CC  CFO Mark Newman. "Following our increased first quarter 2018 dividend, we are continuing to grow our quarterly dividend to a level that we believe is not only sustainable, but provides a platform to reward shareholders in line with our earnings growth over time. Paired with our new share repurchase authorization, we now expect to return the majority of our Free Cash Flow generation to shareholders through 2020."

Vergnano concluded, "Given our strong first half results and visibility into the rest of 2018, we believe that earnings will be in the top end of our previously announced range. As we look over the longer term, we remain confident in our ability to meet or exceed our three-year financial targets, supported by our commitment to Ti-Pure™ Value Stabilization, assisting our fluorochemicals customers through the transition to Opteon™ refrigerants, and further investment in application development to meet growing needs for fluoropolymers. The Board of Directors authorization of an increased dividend and new share repurchase plan underscore our expectations for long-term growth."

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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