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PPG Industries Selling Plaka Plasterboard Business to Knauf
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PPG Industries (PPG - Free Report) has agreed to sell the assets of its Mexico-based Plaka plasterboard and cement-board business to Knauf International GmbH. Financial terms of the deal were not divulged.
PPG Industries acquired the Plaka business in 2014 as part of its buyout of leading Mexican paint company – Comex S.A. de C.V. – for $2.3 billion. Plaka makes plasterboard, cement board and drywall mainly for the Mexican construction market. The business, with around $30 million of sales in 2015, employs roughly 200 people and operates a manufacturing plant in Queretaro, Mexico.
The transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to consummate in first-half 2017.
The divestment is part of PPG Industries’ ongoing portfolio transformation actions. As part of these actions, the company completed the sale of its European fiber glass operations to Nippon Electric Glass Co. Ltd. and its flat glass manufacturing and glass coatings operations to Vitro S.A.B. de C.V., in early Oct 2016.
PPG Industries’ shares have lost 4.2% year-to-date while the Zacks categorized Chemicals-Diversified industry has gained 15.6% over the same period. PPG Industries remains exposed to significant currency headwinds. Moreover, the company faces macroeconomic challenges and some of its end-markets including marine still remain sluggish.
PPG Industries swung to a loss on a reported basis in the third quarter of 2016, hurt by sizable pension settlement charges. Adjusted earnings were in line with the Zacks Consensus Estimate while sales trailed expectations.
PPG Industries expects a modest improvement in global demand and projects year-over-year earnings growth in fourth-quarter 2016 to be similar or modestly higher than that of the third quarter. The company’s board recently approved broad restructuring actions aimed at lowering cost structure globally, with special emphasis on regions and end-use markets with weakest business conditions. The company expects to record a pretax restructuring charge of $190−$200 million, or 53−58 cents per share, in the fourth quarter of 2016.
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. These measures are likely to keep the company competitive in the end markets by lowering costs.
PPG Industries currently carries a Zacks Rank #3 (Hold).
FMC has an expected earnings growth of around 14.3% for the current year.
Chemours has an expected earnings growth of around 60.1% for the current year.
Innophos has an expected earnings growth of around 51.4% for the current year.
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PPG Industries Selling Plaka Plasterboard Business to Knauf
PPG Industries (PPG - Free Report) has agreed to sell the assets of its Mexico-based Plaka plasterboard and cement-board business to Knauf International GmbH. Financial terms of the deal were not divulged.
PPG Industries acquired the Plaka business in 2014 as part of its buyout of leading Mexican paint company – Comex S.A. de C.V. – for $2.3 billion. Plaka makes plasterboard, cement board and drywall mainly for the Mexican construction market. The business, with around $30 million of sales in 2015, employs roughly 200 people and operates a manufacturing plant in Queretaro, Mexico.
The transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to consummate in first-half 2017.
The divestment is part of PPG Industries’ ongoing portfolio transformation actions. As part of these actions, the company completed the sale of its European fiber glass operations to Nippon Electric Glass Co. Ltd. and its flat glass manufacturing and glass coatings operations to Vitro S.A.B. de C.V., in early Oct 2016.
PPG Industries’ shares have lost 4.2% year-to-date while the Zacks categorized Chemicals-Diversified industry has gained 15.6% over the same period. PPG Industries remains exposed to significant currency headwinds. Moreover, the company faces macroeconomic challenges and some of its end-markets including marine still remain sluggish.
PPG Industries swung to a loss on a reported basis in the third quarter of 2016, hurt by sizable pension settlement charges. Adjusted earnings were in line with the Zacks Consensus Estimate while sales trailed expectations.
PPG Industries expects a modest improvement in global demand and projects year-over-year earnings growth in fourth-quarter 2016 to be similar or modestly higher than that of the third quarter. The company’s board recently approved broad restructuring actions aimed at lowering cost structure globally, with special emphasis on regions and end-use markets with weakest business conditions. The company expects to record a pretax restructuring charge of $190−$200 million, or 53−58 cents per share, in the fourth quarter of 2016.
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. These measures are likely to keep the company competitive in the end markets by lowering costs.
PPG Industries currently carries a Zacks Rank #3 (Hold).
PPG INDS INC Price
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Stocks to Consider
Better-ranked companies in the chemical space include FMC Corp. (FMC - Free Report) , The Chemours Company (CC - Free Report) and Innophos Holdings Inc , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
FMC has an expected earnings growth of around 14.3% for the current year.
Chemours has an expected earnings growth of around 60.1% for the current year.
Innophos has an expected earnings growth of around 51.4% for the current year.
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 >>