What happened

Shares of Kronos Worldwide (KRO -0.23%) slid 15.8% through 11:30 a.m. ET this morning after the titanium dioxide pigment producer reported an even worse fourth quarter than investors had expected.  

The company's products are used as a whitener in paints, cosmetics, paper, and other products. Heading into the fourth-quarter report, analysts had forecast a loss of $0.07 per share on $319.8 million in sales. As it turned out, Kronos cleared that revenue hurdle, with sales topping $342.2 million. But it whiffed on earnings, losing $0.18 per share.  

So what

So an earnings miss but a revenue beat at first glance looks like only a mixed quarter, and not ordinarily the kind of thing that would drive a stock down 16%.

But while Kronos beat estimates on sales, that number still dropped 31% from the $496 million in the year-ago quarter, and that's definitely bad news. Although management did its best to cut costs to compensate for the revenue shortfall (cost of goods sold was down 19%, and selling, general, and administrative spending was 25% lower year over year), it simply wasn't able to cut them as fast as revenue was dropping.

Result: Kronos flipped to an operating loss for the quarter, and a net loss as well.

Now what

Kronos still managed to end 2022 in the black, reporting a full-year profit of $0.90 per share, down only 8% from 2021. Still, that was a worse result than you would expect given that full-year sales declined only 0.5% year over year.

Looked at one way, this leaves Kronos Worldwide stock trading for a seemingly modest 9.2 times trailing earnings after today's stock price slide. But don't be fooled.

With more debt than cash on its balance sheet, sales on a decline, earnings in the red, and -- on top of all that -- no reassuring words from management promising a return to profitability next year, the outlook for Kronos stock right now looks rather grim. It seems more like a value trap than a value stock to me.