The Chemours Company (NYSE:CC) crashed in pre-market trading after the chemicals company delayed the filing of its 10-K report and announced disappointing preliminary FY23 results. The company also announced the appointment of Denise Dignam as the Interim CEO and Matt Abbott as the Interim CFO.
Chemours made these appointments following the Board’s decision to place President and CEO Mark Newman, SVP and CFO Jonathan Lock, and VP, Controller, and Principal Accounting Officer Camela Wisel on administrative leave.
The company has placed its senior management on administrative leave pending an internal review that is being overseen by the Board’s Audit Committee with the assistance of external counsel. The focus of this review includes reviewing reports made to its Ethics Hotline and issues with its working capital management.
As a result, Chemours is evaluating potential material weaknesses in its internal control over financial reporting. The company expects to report its findings and remediation efforts in its Annual Report or 10-K filing.
Considering the above investigation, Chemours requires more time to complete its year-end reporting process and, as a result, will delay the filing of its 10-K, earnings release, and conference call.
The company, however, announced its preliminary FY23 results and expects net sales of around $6 billion in FY23, a decline of 11.7% year-over-year, and missed consensus estimates by $20 million. More disappointingly, Chemours anticipates a loss of $225 million to $235 million in FY23 compared to a profit of $578 million in the same period last year. This FY23 loss estimate comprises $746 million in pre-tax litigation settlements and restructuring charges of $153 million.
Is CC Stock a Buy?
Analysts remain cautiously optimistic about CC stock with a Moderate Buy consensus rating based on two Buys and Holds each. Over the past year, CC has slid by more than 15%, and the average CC price target of $35.25 implies an upside potential of 22.7% at current levels.
