Executive Summary

Q3 2025 was weak: NL reported a net loss of $7.8M and $(0.16) EPS as equity losses at Kronos and unrealized losses on marketable securities offset solid CompX performance .
CompX delivered strong top-line growth (+19% YoY to $40.0M) with segment profit of $4.8M (+45% YoY) on security products and marine demand; however, consolidated gross margin contracted sequentially as Kronos’ downturn persisted .
Kronos swung to a $19.2M operating loss on 7% lower TiO2 pricing and lower operating rates (80% utilization), including ~$27M of unabsorbed fixed costs; NL also booked a non-cash tax expense from Kronos’ German rate change that reduced EPS by ~$0.10 .
No formal revenue/margin guidance was provided; NL maintained its $0.09 quarterly dividend (Q4 payable Dec 16) following an August $0.21 special dividend, signaling confidence in liquidity despite cyclical headwinds .

What Went Well and What Went Wrong

What Went Well

CompX growth and profitability: Net sales rose to $40.0M (from $33.6M YoY) and segment profit increased to $4.8M (from $3.3M), driven by higher Security Products (government) and Marine Components (towboat, government, industrial) demand .
Operational mix at Kronos: Despite macro pressure, Kronos held North American volumes higher even as European and export markets softened, highlighting regional resilience .
Cost tailwinds building: Kronos noted lower production costs (raw materials) impacted YTD results positively, a potential margin lever as utilization normalizes .

What Went Wrong

Kronos downturn intensified: 7% YoY decline in TiO2 pricing; operating loss of $19.2M; ~80% utilization with ~$27M unabsorbed fixed costs materially pressured NL’s equity income .
Non-cash tax headwind: NL’s Q3 loss includes $5.9M expense at Kronos related to German deferred tax asset remeasurement (~$0.10 EPS drag), overshadowing CompX gains .
Securities mark-to-market: Unrealized losses of $0.5M this quarter (and $9.1M YTD) on marketable equity securities added volatility to reported earnings vs. prior-year gains .

Financial Results

Consolidated Results vs Prior Periods and Prior Year

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue (Net Sales, $USD Millions)	$33.6	$40.3	$40.3	$40.0
Gross Margin ($USD Millions)	$9.5	$12.2	$12.9	$11.0
Gross Margin (%)	28.3%	30.3%	32.0%	27.5%
Income from Operations ($USD Millions)	$2.1	$3.2	$2.8	$1.8
Net Income (Loss) Attributable to NL ($USD Millions)	$36.0	$0.7	$0.3	$(7.8)
Diluted EPS ($USD)	$0.74	$0.01	$0.01	$(0.16)
Equity in Earnings (Losses) of Kronos ($USD Millions)	$21.9	$5.5	$(2.8)	$(11.3)
Marketable Equity Securities Gains (Losses) ($USD Millions)	$18.6	$(8.5)	$(0.1)	$(0.5)
Interest & Dividend Income ($USD Millions)	$2.7	$2.0	$1.5	$2.1

Segment Breakdown (CompX)

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
CompX Net Sales ($USD Millions)	$33.6	$40.3	$40.3	$40.0
CompX Segment Profit ($USD Millions)	$3.3	$5.9	$6.3	$4.8

Kronos Operating KPIs (NL Equity Method, Influences NL P&L)

KPI	Q1 2025	Q2 2025	Q3 2025
Net Sales ($USD Millions)	$489.8	$494.4	$456.9
Income from Operations ($USD Millions)	$38.4	$7.4	$(19.2)
Avg Operating Rate (%)	93%	81%	80%
Unabsorbed Fixed Costs ($USD Millions)	N/A	~$20	~$27
Avg TiO2 Price vs PY	+2%	−1%	−7%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q3-Q4 2025	None provided	None provided	Maintained no formal guidance
Margins	FY/Q3-Q4 2025	None provided	None provided	Maintained no formal guidance
Dividend per Share (Quarterly)	Q3 2025	$0.09	$0.09 payable Sep 23, 2025	Maintained
Dividend per Share (Quarterly)	Q4 2025	$0.09	$0.09 payable Dec 16, 2025	Maintained
Special Dividend	Aug 2025	None	$0.21 one-time payable Aug 28, 2025	Introduced

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was found in our document catalog; we searched for “NL Industries Q3 2025 earnings call transcript” and did not find a transcript. Themes below reflect press release commentary.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
TiO2 pricing and demand	Q1: Avg prices +2% YoY, volumes up in NA/EU . Q2: Pricing −1% YoY; global uncertainty delaying recovery .	Q3: Pricing −7% YoY; prolonged downturn, customer hesitancy to build inventories .	Deteriorating
Operating rates / absorption	Q1: 93% utilization, improved absorption . Q2: 81% utilization; ~$20M unabsorbed fixed costs .	Q3: 80% utilization; ~$27M unabsorbed fixed costs .	Deteriorating
Regional mix	Q1/Q2: North America resilient; export markets weaker .	Q3: NA volumes higher; EU/export weaker .	Mixed
FX impact	Q1: FX reduced sales by ~$11M . Q2: FX increased sales by ~$8M .	Q3: FX increased sales by ~$14M; increased operating loss by ~$4M .	Volatile
Security Products & Marine	Q1/Q2: Higher sales to government and towboat markets .	Q3: Continued strength across government, towboat, industrial markets .	Improving
Litigation/Corp expense	Q1: Higher environmental G&A; lower litigation . Q2: Lower litigation and environmental costs .	Q3: Corporate expenses up $0.7M YoY on litigation .	Slightly Negative
Taxes/non-cash	Q1: —	Q2: —	Q3: Kronos deferred tax expense reduced NL EPS by ~$0.10; earn-out remeasurement gain ~$0.02 EPS .

Management Commentary

“CompX’s segment profit increased… due to higher sales and gross margin at each of CompX’s Security Products and Marine Components reporting units.”
“Kronos’ net sales decreased… primarily due to the effects of lower average TiO2 selling prices and lower sales volumes in its European and export markets somewhat offset by higher sales volumes in its North American market.”
“Kronos’ unabsorbed fixed production costs related to decreased production volumes in the third quarter of 2025 were approximately $27 million.”
“Net loss… includes expense of $5.9 million ($4.7 million, or $.10 per share, net of tax) related to Kronos’ non-cash deferred income tax expense… and income of $1.1 million ($.9 million, or $.02 per share, net of tax) due to Kronos’… remeasurement of its earn-out liability.”

Q&A Highlights

No Q3 2025 earnings call transcript was available; NL did not publish a Q&A that we could locate in the document catalog. We searched for an earnings call transcript and found none.

Estimates Context

S&P Global Wall Street consensus for Q3 2025 EPS and Revenue was unavailable for NL; we therefore cannot compute a beat/miss vs estimates. Values retrieved from S&P Global.
Given the lack of coverage, investors should anchor on reported figures and disclosed drivers (Kronos pricing/utilization, corporate litigation costs, non-cash tax items) for near-term modeling .

Key Takeaways for Investors

NL’s consolidated results are levered to Kronos’ TiO2 cycle; weak pricing and suboptimal utilization drove equity losses and unabsorbed fixed costs, overwhelming CompX’s solid execution .
CompX continues to perform well with robust government security and marine demand—this segment is a stabilizer, but its size is insufficient to offset the Kronos-driven volatility near term .
Non-cash items significantly impacted Q3 EPS (German deferred tax asset remeasurement −$0.10 EPS; earn-out remeasurement +$0.02), highlighting sensitivity to accounting adjustments at Kronos .
Dividend policy remains intact ($0.09 quarterly) and was supplemented by a $0.21 special dividend in August, signaling balance sheet resilience and capital return discipline despite cyclicality .
Near-term catalysts: any improvement in TiO2 pricing/volumes and operating rates at Kronos; reduction in unabsorbed fixed costs; continued CompX margin expansion .
Medium-term thesis: monitor Kronos’ integration of LPC and cost savings, FX tailwinds, and macro/trade policy clarity; CompX’s end-market diversification offers steady cash generation .
With estimates coverage limited, traders should focus on disclosed operational KPIs (TiO2 pricing moves, utilization, fixed cost absorption) and NL’s mark-to-market securities impacts for quarterly earnings risk .

NL INDUSTRIES INC (NL)·Q3 2025 Earnings Summary