NL Industries Reports Decline in Net Income Despite Increased Sales in Q1 2025

NL Industries, Inc. reported its financial results for the first quarter of 2025, revealing a significant decline in net income attributable to stockholders, which fell to $0.7 million, or $0.01 per share, compared to $6.8 million, or $0.14 per share, in the same period of 2024. The decrease in profitability was primarily driven by an unrealized loss of $8.5 million on marketable equity securities, contrasting with a gain of $2.4 million in the prior year. However, the company noted an increase in equity earnings from its investment in Kronos Worldwide, which rose to $5.5 million from $2.5 million, and a notable improvement in segment profit from its subsidiary CompX, which increased to $5.9 million from $3.7 million.

In terms of operational performance, NL Industries experienced a 6% increase in net sales, reaching $40.3 million in the first quarter of 2025, up from $38.0 million in the previous year. This growth was attributed to higher sales in the Marine Components segment, particularly to the towboat and government markets. The cost of sales decreased slightly, leading to an improved gross margin of 30% compared to 25% in the prior year. Despite the increase in sales, corporate expenses rose to $2.7 million, primarily due to higher environmental remediation costs and general administrative expenses.

The company’s balance sheet showed a decrease in total assets, which fell to $520.0 million as of March 31, 2025, down from $578.3 million at the end of 2024. This decline was largely due to a reduction in cash and cash equivalents, which decreased to $110.0 million from $163.2 million. Current liabilities also saw a significant drop, primarily due to a reduction in accrued environmental remediation costs, which decreased from $58.1 million to $1.8 million. The company’s equity increased slightly to $416.8 million, reflecting retained earnings adjustments and comprehensive income changes.

Looking ahead, NL Industries expressed cautious optimism regarding its operational outlook. CompX anticipates modest growth in net sales for 2025, driven by expected increases in demand from the government and industrial markets. However, the company remains vigilant about potential challenges, including ongoing raw material price increases and the impact of tariffs on its supply chain. NL Industries is also focused on maintaining liquidity, with $131.0 million in cash and cash equivalents available to meet its short-term obligations. The company plans to continue monitoring market conditions and adjusting its strategies accordingly to navigate the evolving economic landscape.