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PPG Industries Declares Restructuring Actions to Lower Costs
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PPG Industries, Inc. (PPG - Free Report) has announced the approval of restructuring measures by its board of directors. The company will be undertaking broad restructuring actions to lower its cost structure globally. Special emphasis will be put on regions and end-use markets with the weakest business conditions to reduce operational, functional and administrative costs.
PPG Industries expects to record a pretax restructuring charge in the fourth quarter of 2016 of $190−$200 million, or 53−58 cents per share. Out of this, roughly $140 million corresponds to cash costs and $50−$60 million is related to the write-down of certain assets along with other non-cash costs. Of this $140 million, roughly $110 million is projected in 2017, while the balance is expected in 2018.
PPG Industries expects roughly $15 million of incremental restructuring-related cash costs in 2017, in addition to the projected pretax charge and cash costs. The charge is expected for certain items that need to be expensed on an as-incurred basis.
With the conclusion of the restructuring actions, PPG Industries expects to generate $120−$130 million in annual savings, with $40−$50 million of savings expected to be realized in 2017. The remainder of the expected savings has been projected to be substantially realized by the end of 2018. These measures are likely to keep the company competitive in the end markets by lowering costs.
Shares of PPG Industries fell roughly 0.1% to close at $99.30 on Dec 9.
PPG Industries’ shares have gained 0.5% year-to-date while the Zacks categorized ‘Chemicals-Diversified’ industry has gained 17% over the same period. For the third-quarter of 2016, the company’s earnings of $1.54 per share were in line with the Zacks Consensus Estimate while revenues missed the same. While the company expects a slight improvement in global demand and projects year-over-year earnings growth in fourth-quarter 2016, the end-use markets are expected to be the weakest in the fourth quarter.
However, PPG Industries aims to boost shareholder returns with cash deployment in the fourth quarter. The company looks to deploy at least $650 million in the final quarter of 2016, which would place it at the top end of the previously announced deployment goal of $2−$2.5 billion over the 2015−2016 time frame.
Zacks Rank & Key Picks
PPG Industries currently holds a Zacks Rank #3 (Hold).
Some better-ranked companies in the chemical space include The Chemours Company (CC - Free Report) , FMC Corp. (FMC - Free Report) and Celanese Corporation (CE - Free Report) .
FMC has an expected long-term growth of 10.88% and sports a Zacks Rank #1.
Celanese, holding a Zacks Rank #2 (Buy), has an expected long-term growth rate of 8.75%.
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PPG Industries Declares Restructuring Actions to Lower Costs
PPG Industries, Inc. (PPG - Free Report) has announced the approval of restructuring measures by its board of directors. The company will be undertaking broad restructuring actions to lower its cost structure globally. Special emphasis will be put on regions and end-use markets with the weakest business conditions to reduce operational, functional and administrative costs.
PPG Industries expects to record a pretax restructuring charge in the fourth quarter of 2016 of $190−$200 million, or 53−58 cents per share. Out of this, roughly $140 million corresponds to cash costs and $50−$60 million is related to the write-down of certain assets along with other non-cash costs. Of this $140 million, roughly $110 million is projected in 2017, while the balance is expected in 2018.
PPG Industries expects roughly $15 million of incremental restructuring-related cash costs in 2017, in addition to the projected pretax charge and cash costs. The charge is expected for certain items that need to be expensed on an as-incurred basis.
With the conclusion of the restructuring actions, PPG Industries expects to generate $120−$130 million in annual savings, with $40−$50 million of savings expected to be realized in 2017. The remainder of the expected savings has been projected to be substantially realized by the end of 2018. These measures are likely to keep the company competitive in the end markets by lowering costs.
Shares of PPG Industries fell roughly 0.1% to close at $99.30 on Dec 9.
PPG INDS INC Price
PPG INDS INC Price | PPG INDS INC Quote
PPG Industries’ shares have gained 0.5% year-to-date while the Zacks categorized ‘Chemicals-Diversified’ industry has gained 17% over the same period. For the third-quarter of 2016, the company’s earnings of $1.54 per share were in line with the Zacks Consensus Estimate while revenues missed the same. While the company expects a slight improvement in global demand and projects year-over-year earnings growth in fourth-quarter 2016, the end-use markets are expected to be the weakest in the fourth quarter.
However, PPG Industries aims to boost shareholder returns with cash deployment in the fourth quarter. The company looks to deploy at least $650 million in the final quarter of 2016, which would place it at the top end of the previously announced deployment goal of $2−$2.5 billion over the 2015−2016 time frame.
Zacks Rank & Key Picks
PPG Industries currently holds a Zacks Rank #3 (Hold).
Some better-ranked companies in the chemical space include The Chemours Company (CC - Free Report) , FMC Corp. (FMC - Free Report) and Celanese Corporation (CE - Free Report) .
Chemours Company has a long-term growth rate of 15.50% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
FMC has an expected long-term growth of 10.88% and sports a Zacks Rank #1.
Celanese, holding a Zacks Rank #2 (Buy), has an expected long-term growth rate of 8.75%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>