VHI · Valhi, Inc.

Valhi's Q1 2026 results showed a sharp decline in profitability, with net income attributable to stockholders dropping to $2.0 million ($0.07 per share) from $16.9 million ($0.59 per share) a year ago, primarily due to weakness in the Chemicals Segment. This segment, focused on TiO2, reported net sales of $509.8 million, up 4% from $489.8 million, driven by higher volumes in North America, Latin America, and export markets plus a $30 million favorable currency impact (mainly euro). However, these gains were offset by lower European volumes and a 6% decline in average TiO2 selling prices, with prices starting the year lower but rising 2% during the quarter amid recovery efforts from 2025 losses. Operating income plummeted to $14.5 million from $41.2 million, hit by lower prices, reduced production volumes, and a $6 million negative currency effect, though partially mitigated by higher volumes and lower production costs from Q4 2025 initiatives like workforce reductions for improved efficiency at lower rates. Component Products saw modest sales growth to $40.6 million from $40.3 million, with operating income up to $7.1 million from $5.9 million, benefiting from a favorable mix in security products and higher marine sales. Real Estate Management and Development boosted results with $9.7 million in sales (up from $8.5 million) and $11.3 million operating income (from $3.0 million), including a $7.3 million immediate revenue recognition on a commercial parcel sale and $5.4 million ($0.10 per share net) in tax increment reimbursements. Corporate items included slightly lower expenses, but interest expense rose $1.5 million to $14.7 million from higher debt and rates, while interest income fell $0.8 million. An additional $2.0 million tax expense ($0.04 per share net) stemmed from a German tax audit uncertain position. No forward guidance was provided, but management highlighted ongoing pricing recovery and cost measures in Chemicals.