Cytec Industries Inc.

There was plenty of momentum for the specialty chemical companies in the first quarter. Cytec Industries Inc. ( CYT - Snapshot Report ) recently reported its sixth earnings surprise in a row. This Zacks #1 Rank (Strong Buy) continues to be a value stock, with a forward P/E of 13.6.

Cytec Industries is a specialty chemical company serving many different end markets such as aerospace, adhesives, automotive and industrial coatings, inks, mining and plastics.

The New Jersey-based company operates in 4 segments: In Process Separation, Engineered Materials, Additive Technologies, and Coating Resins.

Cytec Beat By 23% in Q1

On Apr 19, Cytec reported first quarter results and blew by the Zacks Consensus Estimate by 24 cents. Earnings were $1.28 compared to the consensus of $1.04. This was 64% higher than a year ago.

Sales rose 2.3% to $783 million from the first quarter of 2011. The quarter was boosted by strong results of Engineered Materials and In Process Separation.

Engineered Materials sales rose 17% to $219 million as selling volumes rose by 14% compared to last year primarily due to higher build rates in the large commercial transport sector and business and regional jet industries. Higher selling prices increased sales by 3%.

In Process Separation sales also jumped 17% to $92 million as selling volumes climbed by 8% over last year due to strong demand for mining chemicals across most regions, especially in Eastern Europe and Africa.

Both Additive Technologies and Coating Resins saw sales fall in the quarter as Europe's slowdown took its toll.

Additive Technologies fell 4% to $68 million due to soft demand in most regions, especially Europe, from the economic slowdown. Coating Resins sales fell 6% to $405 million as volumes fell 9% compared to the year ago quarter due to weaker demand across most of its product lines. Europe and Asia Pacific were particularly weak as customers continued to manage inventories.

Update on the Possible Sale of the Coating Resins Segment

Cytec has been looking to sell its Coating Resins business since the third quarter of 2011. It wants to focus on its more profitable and growing segments.

The company re-iterated that a decision about the sale would be forthcoming in the second quarter of 2012.

Cytec still anticipates closing on a deal by the end of the year.

Double Digit Growth Expected in 2012

Cytec started 2012 with momentum and it expects to post another strong year of growth.

After declining to give guidance in January for 2012 due to the possible sale of the Coating Resins segment, the company went ahead and gave it now.

Earnings are expected to be between $4.35 and $4.65 per share, up from $3.66 in 2011.

It also expects to acquire Umeco Plc by July 2012, which will be accretive for about 20 cents per share. That acquisition is NOT included in the full year guidance.

Zacks Consensus Estimate for 2012 Jumps

Given the big beat and the bullish guidance, it's not surprising that the analysts have been revising 2012 estimates.

In the last 30 days, 4 out of 4 estimates have moved higher, pushing the Zacks Consensus Estimate up to $4.67 from $3.98.

That is strong earnings growth of 28%.

Still a Value Stock

The last time I looked at Cytec in Feb 2012 it was a value stock with a forward P/E of 14.4.

While shares have risen even higher, to new 2-year highs, Cytec has gotten more affordable.

It now trades with a forward P/E of 13.6.

Cytec still has a value price-to-book ratio as well. Its P/B is just 2.4. A P/B ratio under 3.0 usually indicates value.

The company also has other solid fundamentals, including a 1-year return on equity of 20.2%.

In addition, it rewards shareholders with a dividend yielding 0.8%. But the dividend is just an added bonus to the growth you're getting.

Cytec is both a value and a growth stock which is bucking the slowdown in Europe and Asia. Stay tuned for more information on the sale of its Coating Resins business.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at traceyryniec.