Kronos Worldwide (KRO) Q1 2026 earnings summary

Executive summary

• Reported a net loss of $4.8 million ($0.04 per share) for Q1 2026, down from net income of $18.1 million ($0.16 per share) in Q1 2025, primarily due to lower average TiO2 selling prices and lower production volumes, partially offset by higher sales volumes and cost reductions.

• Net loss includes a $2.0 million income tax expense related to an uncertain tax position from a German tax audit.

• Cost reduction initiatives, including workforce reductions in Q4 2025, structurally realigned operations and contributed to improved efficiency and sequential results.

• Segment profit was $15.1 million, down from $41.6 million year-over-year, reflecting lower prices, production, and adverse currency impacts, partially offset by cost reductions and higher sales volumes.

• EBITDA for Q1 2026 was $27.7 million, down from $51.2 million in Q1 2025.

Financial highlights

• Net sales increased 4% to $509.8 million in Q1 2026 from $489.8 million in Q1 2025, driven by higher sales volumes in North America, Latin America, and export markets, and favorable currency exchange rates, partially offset by lower European sales and lower average TiO2 prices.

• Gross margin decreased to 16% from 22% year-over-year, as lower selling prices outweighed cost savings.

• Income from operations fell to $12.6 million from $38.4 million year-over-year.

• Cost of sales rose 11% to $426.5 million, reflecting higher sales volumes and currency impacts, partially offset by lower production costs.

• Cash used in operating activities improved to $51.3 million in Q1 2026 from $102.4 million in Q1 2025, mainly due to favorable changes in working capital.

Outlook and guidance

• Sales volumes improved in North American, Latin American, and export markets, but European demand remains weak despite market share gains.

• Order backlog and lead times increased, providing more production planning flexibility, but overall demand is still below historical levels.

• Price increases were implemented in Q1 2026, with further increases planned for Q2 to offset rising costs, though margins are expected to remain below historical averages.

• Cost pressures from energy and raw materials, especially in Europe, are expected to persist due to geopolitical conflicts and supply chain disruptions.

• Management remains focused on executing pricing and cost initiatives to drive further improvement.