Valhi Chemicals Profit Recovers After a Weak First Quarter

The Tip Desk · August 7, 2026 · 3 min read

Second-quarter Chemicals operating income reached $40.4 million, versus $10.3 million a year earlier, as TiO2 volumes and cost cuts more than offset lower prices.

Valhi, Inc. (VHI), a chemicals, component-products and real-estate developer, reported net income attributable to stockholders of $22.3 million, or $.78 a share, in the second quarter of 2026, compared with $.9 million, or $.03 a share, a year earlier. The increase came primarily from higher operating results at its Chemicals Segment.

That Chemicals recovery was the quarter’s inflection. Chemicals net sales rose 13% from a year earlier after a 4% year-over-year increase in the first quarter of 2026. Operating income in the segment was $40.4 million, after $14.5 million in the first quarter.

Chemicals net sales of $558.1 million were $63.7 million, or 13%, higher than in the second quarter of 2025, on market-share gains across all markets and a favorable euro effect estimated at about $10 million. Those gains were partly offset by lower average TiO2 selling prices and weaker prices and volumes in complementary businesses. A sales-bridge table attributed a 16% lift to TiO2 sales volumes, a 3% drag to TiO2 product pricing, a 2% drag to product mix and other items, and a 2% lift to currency.

Chemicals operating income rose on higher sales volumes, lower production costs including feedstock, lower unabsorbed fixed costs, and cost-reduction initiatives implemented in the fourth quarter of 2025 that were designed to permanently improve the segment’s cost structure. Those factors were partly offset by lower TiO2 prices and a currency drag of about $12 million, primarily from the euro.

Average TiO2 selling prices had been lower at the start of 2026 than at the start of 2025. Those prices increased 4% during the first six months of 2026, after a 2% increase in the first quarter. During the second quarter, the Chemicals Segment announced and implemented various price increases and surcharges in response to higher operating costs.

Total net sales were $606.1 million. Component Products net sales were $43.6 million, versus $40.3 million a year earlier, on higher security-products sales across healthcare, transportation, tool storage and distributor markets and higher marine components sales to the industrial market. Operating income attributable to Component Products was $8.9 million, versus $6.3 million a year earlier, on higher sales and gross margin predominantly at security products and, to a lesser extent, marine components.

Real Estate Management and Development net sales were $4.4 million, versus $5.7 million a year earlier, as development activity slowed near completion of the residential/planned community. Operating income in that segment was $18.4 million. During the second quarter, the segment sold the office building used in its operations and recognized a gain of about $5.8 million, or $3.0 million, or $.10 a share, net of income tax and noncontrolling interest. Corporate expenses were 2% lower than a year earlier, primarily due to lower environmental remediation and related costs. Interest expense increased $.9 million versus a year earlier, primarily due to higher overall debt levels and higher average interest rates.

For the first six months of 2026, Valhi reported net income attributable to stockholders of $24.3 million, or $.85 a share, compared with $17.8 million, or $.62 a share, in the first six months of 2025. The six-month increase came primarily from improved operating results across all business segments. Chemicals net sales for the six months were $1.1 billion, $83.7 million, or 9%, higher than in the first six months of 2025. Chemicals operating income for the six months was $54.9 million, compared with $51.5 million in the first six months of 2025. Currency, primarily the euro, decreased Chemicals operating income by about $18 million in the six months versus the same prior-year period.

The board declared a regular quarterly dividend of $0.08 a share, payable September 24, 2026, to stockholders of record on September 3.