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KW

KRONOS WORLDWIDE INC (KRO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 printed a net loss of $37.0 million (−$0.32 EPS) on net sales of $456.9 million, reflecting weaker TiO2 pricing, lower absorption from reduced operating rates, and a non‑cash deferred tax expense tied to German tax reform; EBITDA fell to $0.6 million versus $123.3 million in Q3 2024 .
  • Results missed S&P Global consensus: revenue $456.9 million vs $472.3 million estimate* and EPS −$0.32 vs −$0.06 estimate*, with EBITDA also below estimates; estimate depth was thin (1–2 covering analysts)*.
  • Sequentially, revenue declined from $494.4 million in Q2 and EBITDA slid from $22.2 million to $0.6 million as unabsorbed fixed costs (~$27 million) weighed on margins amid 80% utilization and elevated cost of sales .
  • Management continues to highlight industry uncertainty (tariffs, geopolitics, customer inventory hesitancy) and FX effects (euro), while maintaining a $0.05 quarterly dividend payable December 11, 2025 .

* Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Maintained balance sheet flexibility and continued shareholder returns via a regular quarterly dividend of $0.05 per share, payable December 11, 2025 .
  • North American sales volumes improved in Q3 despite broader market hesitancy, partially offsetting weaker Europe/export volumes .
  • FX tailwind: currency fluctuations (primarily euro) increased Q3 net sales by approximately $14 million versus Q3 2024 .

What Went Wrong

  • TiO2 pricing and absorption: average TiO2 selling prices were 7% lower YoY and reduced operating rates drove ~$27 million of unabsorbed fixed costs in Q3, crushing margins and segment profitability .
  • Segment performance swung from profit to loss: TiO2 segment loss of $15.3 million in Q3 vs segment profit of $43.4 million in Q3 2024 .
  • Tax reform impact: German corporate tax rate transition triggered a non‑cash deferred tax expense of $19.3 million (≈$0.17 per share) in Q3, exacerbating the net loss .

Financial Results

Quarterly progression (Q1 → Q2 → Q3 2025)

MetricQ1 2025Q2 2025Q3 2025
Net sales ($USD Millions)$489.8 $494.4 $456.9
Cost of sales ($USD Millions)$383.0 $431.6 $409.9
Gross margin ($USD Millions)$106.8 $62.8 $47.0
Income from operations ($USD Millions)$38.4 $7.4 $(19.2)
Net income (loss) ($USD Millions)$18.1 $(9.2) $(37.0)
Diluted EPS ($USD)$0.16 $(0.08) $(0.32)
EBITDA ($USD Millions)$51.2 $22.2 $0.6
Segment profit (loss) ($USD Millions)$41.6 $10.9 $(15.3)
TiO2 sales volumes (kt)136 132 126
TiO2 production volumes (kt)143 125 126

Year-over-year snapshot (Q3 2024 → Q3 2025)

MetricQ3 2024Q3 2025
Net sales ($USD Millions)$484.7 $456.9
Income (loss) from operations ($USD Millions)$38.9 $(19.2)
Net income (loss) ($USD Millions)$71.8 $(37.0)
Diluted EPS ($USD)$0.62 $(0.32)
EBITDA ($USD Millions)$123.3 $0.6
Segment profit (loss) ($USD Millions)$43.4 $(15.3)
TiO2 sales volumes (kt)130 126
Avg TiO2 selling price YoY change (%)—−7%

Actual vs S&P Global consensus (Q3 2025)

MetricEstimate*Actual
Revenue ($USD)$472.3 million*$456.9 million
Primary EPS ($USD)−$0.06*−$0.32
EBITDA ($USD)$15.1 million*$0.6 million

* Values retrieved from S&P Global.

Segment breakdown (TiO2)

MetricQ1 2025Q2 2025Q3 2025
Segment profit (loss) ($USD Millions)$41.6 $10.9 $(15.3)
Key drivers (company disclosed)Pricing, higher volumes, lower unit costs Unabsorbed fixed costs (~$20m), higher-cost Q1 inventory, FX Unabsorbed fixed costs (~$27m), lower pricing, higher-cost Q2 inventory, FX

KPIs and operating rates

KPIQ1 2025Q2 2025Q3 2025
Sales volumes (kt)136 132 126
Production volumes (kt)143 125 126
Utilization (% of practical capacity)93% 81% 80%
FX impact on net sales vs prior year−$11m (Q1) +$8m (Q2) +$14m (Q3)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQ4 2025 payout (payable 12/11/2025)$0.05 (Q3 declaration on 9/18/2025) $0.05 (declared 10/29/2025; payable 12/11/2025) Maintained

Note: The company did not provide formal revenue, margin, OpEx, OI&E, tax rate, or segment guidance in Q3 materials; commentary was qualitative regarding pricing, volumes, tariffs, FX and operating rates .

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript was available in our document set; we searched for “earnings-call-transcript” across 2025 and found none [ListDocuments, 2025-01-01 to 2025-12-31]. The table below tracks themes using company press releases.

TopicPrevious Mentions (Q2 2025)Previous Mentions (Q1 2025)Current Period (Q3 2025)Trend
Tariffs/macro uncertaintyDeferred market recovery; U.S. trade policies and geopolitical tensions impacting volumes/pricing Market pressure in certain regions; FX headwinds “Unprecedented global uncertainty” tied to U.S. trade policies/geopolitics; customers hesitant to build inventories Deteriorating
TiO2 pricing−1% YoY (Q2); down 4% YTD by June +2% YoY; down 3% sequentially in Q1 −7% YoY; down 6% YTD by September Downward
Operating rates/absorption81% utilization; ~$20m unabsorbed fixed costs 93% utilization; improved absorption 80% utilization; ~$27m unabsorbed fixed costs Weaker absorption
FX impact+$8m to net sales in Q2 −$11m to net sales in Q1 +$14m to net sales; FX increased segment loss by ~$4m Mixed tailwind/headwind
LPC acquisition integrationOngoing; SG&A includes $2.2m transaction costs in 2024 comps Continued integration; noted in narrative Results include LPC; earn-out remeasurement gain $4.6m Integration ongoing

Management Commentary

  • “Net sales decreased in the third quarter of 2025 compared to the third quarter of 2024 primarily due to the effects of lower average TiO2 selling prices and lower sales volumes in our European and export markets somewhat offset by higher sales volumes in our North American market.”
  • “Our unabsorbed fixed production costs related to decreased production volumes in the third quarter of 2025 were approximately $27 million.”
  • “Average TiO2 selling prices were 7% lower in the third quarter of 2025 as compared to the third quarter of 2024 and 2% lower in the first nine months of 2025 as compared to the first nine months of 2024.”
  • “We recorded a non-cash deferred income tax expense of $19.3 million ($.17 per share) to reflect the impact of the [German tax rate] reduction on our net German deferred tax asset.”
  • “EBITDA in the third quarter of 2025 was $.6 million compared to $123.3 million in the third quarter of 2024.”

Q&A Highlights

  • No Q3 2025 earnings call/Q&A transcript was available; we searched for “earnings-call-transcript” for KRO across 2025 and found none [ListDocuments, 2025-01-01 to 2025-12-31].

Estimates Context

  • Q3 2025 vs S&P Global consensus: revenue $456.9 million vs $472.3 million estimate* and EPS −$0.32 vs −$0.06 estimate*, both misses; EBITDA $0.6 million vs $15.1 million estimate* also below.*
  • Coverage was thin: EPS estimates count 1 and revenue estimates count 2 for Q3; forward quarters similarly limited, suggesting higher dispersion risk for future prints.*
  • Forward estimates imply trough-like conditions easing into Q1 2026 (EPS $0.04*, revenue $500.9 million*)—management’s comments on pricing recovery, utilization, and tariffs will likely drive revisions.*

* Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q3 was a reset lower: pricing, absorption, and the non‑cash German tax item combined to produce an outsized miss vs consensus; watch for pricing stabilization and operating rate improvements to rebuild margins .
  • Sequential margin compression is acute: EBITDA fell from $22.2 million in Q2 to $0.6 million; normalization hinges on volume recovery and fixed-cost absorption at higher utilization .
  • Macro/tariff uncertainty remains the primary narrative overhang; FX can swing reported results materially quarter-to-quarter .
  • Segment swing to loss underscores cyclical risk in TiO2; monitor North American demand resilience vs weaker Europe/export channels .
  • Dividend maintained ($0.05), signaling commitment to returns despite near-term pressure; assess sustainability if prolonged downturn constrains cash generation .
  • Near-term trading: downside risks tied to further price pressure and inventory destocking; potential upside catalysts include tariff clarity, pricing floors, and utilization recovery.
  • Medium-term thesis: LPC integration and cost actions can re-lever earnings in a recovery; keep an eye on working capital/inventory positioning and any commentary on 2026 contracting/pricing dynamics .