Valhi Chemicals Turn Loss Into Profit on Volume and Prices

The Tip Desk · November 11, 2026 · 3 min read

Chemicals operating income reached $60.5 million in the third quarter as TiO2 prices rose 5% and sales volumes lifted the segment.

Valhi, Inc. (VHI) reported net income attributable to stockholders of $30.2 million, or $1.06 a share, in the third quarter of 2026, compared with a net loss of $22.2 million, or $.78 a share, a year earlier.

The chemicals maker said the swing came primarily from higher operating income in its Chemicals Segment, partially offset by lower operating income in Real Estate Management and Development. Total net sales were $589.0 million.

Chemicals net sales were $541.1 million, $84.2 million, or 18%, higher than in the third quarter of 2025. The company attributed the increase to market share gains in European and North American markets, reflecting anti-dumping duties that remain in effect in certain markets and changing supply conditions, and to higher average TiO2 selling prices. Average TiO2 selling prices in the third quarter of 2026 were 5% higher than in the third quarter of 2025 after the segment implemented price increases and surcharges in response to rising operating costs, including energy and distribution costs. Currency, primarily the euro, decreased Chemicals operating income by about $5 million versus the year-ago quarter.

Chemicals operating income was $60.5 million, versus a loss of $15.9 million a year earlier. The company said the increase was driven by higher sales volumes, higher production rates that reduced unabsorbed fixed production costs, lower raw material costs (primarily feedstock) and lower production costs from cost-reduction initiatives implemented in the fourth quarter of 2025. Those factors were partially offset by higher energy and distribution costs and the unfavorable impact of currency. The sales table showed TiO2 volumes contributing 14 percentage points to the 18% sales increase, product pricing 5 points, mix/other minus 1 point, and currency no effect in the quarter.

Versus the second quarter of 2026, Chemicals net sales were $541.1 million, $17.0 million, or 3%, lower than $558.1 million. Chemicals operating income of $60.5 million was $20.1 million, or 50%, higher than the $40.4 million reported in the second quarter. In the second quarter the company had already announced and implemented price increases and surcharges; average TiO2 selling prices had risen 4% during the first six months of 2026.

Component Products net sales were $44.0 million, compared with $40.0 million a year earlier, on higher marine components sales to the towboat and industrial markets and, to a lesser extent, higher security products sales to healthcare and tool storage. Operating income attributable to the segment was $6.4 million, versus $4.8 million, which the company said reflected higher sales and gross margin at the security products and marine components reporting units.

Real Estate Management and Development net sales were $3.9 million, versus $6.6 million a year earlier, as the pace of development activity slowed for previously sold parcels near completion of development work. Operating income in that segment was $0.5 million, versus $19.7 million. Corporate expenses were 13% lower in the third quarter, primarily due to lower general and administrative costs, partially offset by higher environmental remediation and related costs. Interest expense decreased $1.1 million versus the year-ago quarter on lower overall average debt balances.

Third-quarter net income included a non-cash deferred income tax benefit of $12.1 million ($8.0 million, or $.28 a share, net of noncontrolling interest) related to proposed currency regulations under §987 issued in August 2026. The year-ago quarter included a non-cash gain of $4.6 million ($2.4 million, or $.08 a share, net of tax and noncontrolling interest) on remeasurement of the earn-out liability tied to the 2024 Louisiana Pigment acquisition.

The board declared a regular quarterly dividend of $0.08 a share, payable December 17, 2026 to stockholders of record November 19, 2026.