Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Chemours Co Stock Popped Today

By Matthew DiLallo - Feb 24, 2016 at 3:31PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

While earnings weren’t all that great, the outlook gave investors a reason to cheer.

What: Shares of Chemours (CC -1.34%) jumped 14% by 3:00 p.m. EST on Wednesday. Driving the buying spree was the company's fourth-quarter results as well as its outlook for what lies ahead.

So what: On the surface Chemours results weren't all that great. It reported fourth-quarter revenue of $1.4 billion, which was 12% less than the year-ago quarter. Meanwhile, adjusted net income fell to $5 million, or $0.03 per share, which is down from $91 million, or $0.50 per share in the year-ago quarter. This was largely due to lower average prices in the company's Titanium Technologies segment as well as $66 million in unfavorable foreign currency movements. However, what pleased investors about these results was the fact that Chemours has been able to capture $100 million in cost reductions during the second half of the year.

Even better, Chemours has line-of-sight on its next $200 million in cost reductions for 2016. This will enable it to deliver improved earnings in 2016 as well as be modestly free cash flow positive. On top of that, the company remains on track to reduce its structural costs by $350 million while growing its earnings by $150 million in order to deliver a $500 million in financial improvement by the end of 2017.

Now what: While Chemours is experiencing some challenging market conditions right now, it's making the necessary changes to transform the company to better align with conditions. Further, when those cost reductions are combined with the expansion projects it has under way, the company expects to be able to vastly improve its bottom line over the next two years. It's an outlook that investors are clearly buying into today.

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Chemours Company Stock Quote
The Chemours Company
CC
$34.49 (-1.34%) $0.47

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
377%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.