Tronox Q2 Results Top Estimates; Shares Rise

Titanium products producer Tronox Holdings, Plc (TROX) reported stronger-than-expected second-quarter results on the back of growth in net revenues.

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Following the news, shares of the company rose 1.4% to close at $19.01 in the extended trading session.

The company reported quarterly net sales of $927 million, up 60.4% from last year. The growth can be attributed primarily to the rise of 5% in average selling prices of TiO₂and zircon. Moreover, the sales figure surpassed the consensus estimate of $924.61 million.

Notably, the company’s earnings per share (EPS) of $0.61 topped the consensus estimate of $0.51. It compares favorably with the previous year’s EPS of $0.03.

The Co-CEO of Tronox, Jean-François Turgeon, said, “For the third quarter, we are balancing strong customer demand against our ability to deliver based on continued supplier and logistics constraints. Taking these factors into consideration, we expect TiO₂ volumes to decline 5-10 percent sequentially, which still represents growth compared to third quarter volumes in 2020, 2019, and 2018.”

He added, “Zircon sales volumes are expected to remain elevated above 2019 and 2020 quarterly volume levels, benefiting from sales from inventory, though lower than second quarter 2021 levels. While the operational disruptions from the second quarter will roll off, continued pressures on the cost side of the business from inflation and raw material price increases, as well as chlorine availability issues, are expected to partially offset continued price increases in the third quarter. As a result, we anticipate Q3 2021 Adjusted EBITDA of $245-$260 million.” (See Tronox stock chart on TipRanks)

On July 28, Alembic Global analyst Hassan Ahmed reiterated a Buy rating on the stock with a price target of $31, which implies upside potential of 65.3% from current levels.

Consensus among analysts is a Strong Buy based on 4 Buys and 1 Hold. The average Tronox price target of $28.20 implies upside potential of 50.4% from current levels.

Tronox scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 125.9% over the past year.