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Chemours beat first-quarter expectations as strong performance in Thermal & Specialized Solutions and Titanium Technologies offset weakness in Advanced Performance Materials, which was hurt by the Washington Works outage.
Balance-sheet repair continued with the sale of nearly all Kuan Yin properties and recent debt refinancing, helping the company pay down near-term obligations and target lower leverage over time.
Management kept a constructive outlook, guiding for second-quarter sequential growth across the company and reaffirming full-year sales and EBITDA guidance, even as it lowered free cash flow conversion expectations due to tax impacts.
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Chemours (NYSE:CC) said it opened 2026 with first-quarter results that were “well above earnings expectations,” driven by strong execution in its Thermal & Specialized Solutions and Titanium Technologies segments, while Advanced Performance Materials continued to recover from an outage at the company’s Washington Works facility.
President and Chief Executive Officer Denise Dignam told analysts that the quarter reflected “disciplined execution and strategic focus across the company,” with Thermal & Specialized Solutions, or TSS, delivering a record first quarter and Titanium Technologies, or TT, exceeding earnings expectations despite a challenging market backdrop.
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The company also highlighted progress on its balance sheet, including the sale of nearly all of its Kuan Yin properties ahead of schedule. Dignam said Chemours used available proceeds to pay down a meaningful portion of near-term debt and remains on track to complete the sale of the remaining parcel in 2026, which is expected to provide an additional $60 million of gross proceeds.
Dignam said Chemours’ TSS business delivered a record first quarter, with net sales rising 22% from the prior-year period. The gains were largely attributed to higher pricing, stronger volumes and favorable product mix across refrigerant markets.
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The company cited strength in both Freon and Opteon refrigerants. Opteon posted another quarter of double-digit year-over-year growth, while Freon benefited from automotive aftermarket demand in North America. Dignam said the business also benefited from “disciplined quota management,” and TSS margins expanded to 33% in the quarter.
Chief Financial Officer Shane Hostetter said Chemours expects TSS second-quarter net sales to rise sequentially in the low- to mid-teens percentage range, reflecting the seasonal cooling demand in the Northern Hemisphere. Adjusted EBITDA for the segment is expected to range from $210 million to $225 million.
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Hostetter noted that roughly $10 million of adjusted EBITDA was pulled forward into the first quarter due to timing, which he said modestly tempers the expected sequential progression in the second quarter. He also said residential demand has been weaker than anticipated, with a slower start to the cooling season delaying equipment installations and aftermarket activity.
During the question-and-answer session, Dignam said Chemours sees Freon strength as “very sticky,” particularly in the automotive aftermarket. She said the company is one of two domestic suppliers of 134a and has an advantaged quota position. She also said Freon demand is largely tied to the auto aftermarket, with a “long tail” associated with internal combustion engine vehicles.
Chemours said its Titanium Technologies business performed well in the first quarter even as market conditions remained difficult. Dignam said the segment saw global stability and seasonal demand improvement in North America and Europe, but lower volumes and less favorable product mix in some non-Western markets weighed on overall global volumes.
Despite the volume pressure, the segment’s adjusted EBITDA exceeded company expectations due to pricing actions, cost management and operational discipline. Dignam said TT pricing rose 3% sequentially in the first quarter, reflecting pricing initiatives announced in December and continued on April 1 across key end markets.
For the second quarter, Hostetter said Chemours expects TT net sales to increase sequentially in the mid- to high-teens percentage range, supported by seasonal factors, mineral sales timing and TiO2 pigment demand amid evolving global conditions. Adjusted EBITDA for TT is expected to range from $40 million to $50 million.
Chemours also announced a long-term chlorine supply agreement with Olin to support its DeLisle site beginning in 2028. Dignam said the agreement provides reliable supply at “value-accretive economics” and supports the company’s goal of being one of the lowest-cost chloride TiO2 producers globally. She also said Chemours will not proceed with a previously planned on-site chlorine facility at DeLisle after that supply agreement was terminated in March.
Analysts asked about sulfur-related cost inflation affecting sulfate-based TiO2 producers. Dignam said Chemours has no sulfate production and remains focused on being a low-cost chloride producer. She said sulfur cost increases could create opportunities for Chemours but emphasized that the company’s strategy remains centered on fair trade regions, pricing and profitability.
Advanced Performance Materials posted weaker first-quarter results, with net sales down year over year due primarily to lower volumes. Dignam said results were constrained by the Washington Works outage and the prior closure of the Advanced Materials SPS Capstone line. The outage created a $25 million headwind to adjusted EBITDA, she said.
Hostetter said second-quarter APM net sales are expected to increase sequentially in the low- to high-30% range as Washington Works resumes normal operations. Adjusted EBITDA is forecast between $12 million and $18 million, though he said cost pressures and volume limitations tied to the first-quarter downtime will continue to weigh on profitability.
Dignam said Chemours expects APM to return to a $30 million to $40 million EBITDA range in the back half of the year. She pointed to a stronger order book in Performance Solutions, particularly in semiconductor and data center markets. Hostetter said APM’s order velocity has reached levels not seen in several years.
The company also discussed its two-phase immersion cooling technology. Dignam said a 12-month field trial with NTT using Chemours’ fluid was successful, with no signs of fluid or equipment degradation. She said more than 200 prospective customers and partners have seen the fluid in action, and Chemours expects capacity to come online toward the end of the year for customer sampling and process refinement.
On a consolidated basis, Chemours expects second-quarter net sales to rise 15% to 20% sequentially, with adjusted EBITDA in the range of $220 million to $250 million. Corporate expenses are expected between $45 million and $50 million, capital expenditures are forecast around $50 million, and free cash flow generation is expected to be at least $100 million.
Hostetter said Chemours still expects full-year consolidated net sales, adjusted EBITDA and capital expenditures to align with its prior guidance, despite a mixed operating environment, soft commercial end markets and raw material and cost inflation. However, full-year free cash flow conversion is now expected to be above 20%, down from the prior outlook, due to tax implications related to the Kuan Yin land sale.
The company said it reduced debt by approximately $160 million in April and completed a $700 million refinancing in March, extending maturities tied to its 2027 unsecured notes and a portion of its 2028 unsecured notes out to 2034. Hostetter said Chemours has addressed close to $2 billion of near-term debt since the fourth quarter of 2025.
Chemours now expects its net leverage ratio to be below 3.8 times adjusted EBITDA by year-end 2026. Hostetter said the company remains focused on achieving its longer-term liquidity objective of net leverage below 3 times adjusted EBITDA.
Dignam said Chemours continues to make progress under its Pathway to Thrive strategy, pointing to operational reliability, cost discipline, targeted growth investments, portfolio actions and balance sheet de-risking. She said the company is integrating the Chemours Business System to apply lean principles across operations.
Management also said it is monitoring geopolitical risk, including conflict in the Middle East and related volatility in energy markets and chemical supply chains. Dignam said Chemours is working to mitigate cost pressures through pricing and supply chain actions while remaining selective in responding to possible market opportunities.
“With a strong start to the year, the right strategic actions underway, and a proven ability to execute through uncertainty, Chemours is well positioned to deliver on our commitments,” Dignam said.
Chemours Company, established in 2015 as a spin-off from E. I. du Pont de Nemours and Company, is a global chemistry organization headquartered in Wilmington, Delaware. Since its formation, Chemours has focused on delivering performance chemicals that help customers lower their carbon footprint, increase energy efficiency and conserve water. The company operates with a commitment to safety, environmental stewardship and innovation.
Chemours' principal business activities are organized into three core segments.
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The article "Chemours Q1 Earnings Call Highlights" was originally published by MarketBeat.
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