On November 2, 2023, NL Industries Inc (NL, Financial) released its Q3 2023 earnings report. The company reported a net loss attributable to NL stockholders of $0.1 million, a significant improvement from a net loss of $8.9 million in Q3 2022. This improvement was largely due to an unrealized gain of $0.4 million related to the change in value of marketable equity securities, compared to an unrealized loss of $24.2 million in Q3 2022.
Financial Performance
Net sales for Q3 2023 were $40.3 million, a decrease from $42.9 million in Q3 2022. This decrease was predominantly due to lower Marine Components sales primarily to the towboat market, partially offset by higher Security Products sales in Q3 2023. Income from operations attributable to CompX was $6.6 million for Q3 2023, an increase from $6.0 million in Q3 2022. This increase was due to higher Security Products sales and improved gross margin percentages at both reporting units, partially offset by lower Marine Components sales.
Equity in Losses of Kronos
NL recognized equity in losses of Kronos of $6.2 million in Q3 2023, a significant downturn from equity in earnings of $6.4 million in Q3 2022. This was primarily due to lower sales volumes and lower average TiO2 selling prices in all major markets of Kronos.
Corporate Expenses and Income
Corporate expenses in Q3 2023 were comparable to the same period in 2022. Interest and dividend income increased in Q3 2023 compared to the same period in 2022, primarily due to higher average interest rates and increased investment balances, somewhat offset by lower average balances on CompX’s revolving promissory notes receivable from Valhi.
Summary
In summary, NL Industries Inc (NL, Financial) reported a net loss of $0.1 million in Q3 2023, a significant improvement from a net loss of $8.9 million in Q3 2022. Despite a decrease in net sales, income from operations increased due to higher Security Products sales and improved gross margin percentages. However, the company recognized equity in losses of Kronos due to lower sales volumes and lower average TiO2 selling prices.
Explore the complete 8-K earnings release (here) from NL Industries Inc for further details.
