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Praxair Unit Wins Rolls-Royce's 10-year Coating Contract

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Industrial gas producer and supplier, Praxair Inc. (PX - Free Report) announced that it has won a 10-year contract to provide its Tribomet™ abrasive coatings to Indiana-based aerospace producer, Rolls-Royce. Financial terms of the deal have been kept under wraps.

We believe such contracts reflect customers’ preference for Praxair’s products and will prove beneficial for its growth, going forward. The company had a solid backlog of $1.5 billion at the end of fourth-quarter 2016. Despite such bright prospects, we believe that exposure to near-term headwinds will weigh on its performance in the quarters ahead. Over the last one month, shares of this Zacks Rank #3 (Hold) company lost 1.32%, narrower than the decline of 1.44% recorded by the Zacks categorized Chemical Diversified industry.

As revealed, Praxair secured the contract through its Praxair Surface Technologies (PST) subsidiary. The business arm specializes in providing high-performance coatings and technologies to its customers in the aviation, energy and other industries. Per the Rolls-Royce contract, PST will provide its coating services to rotating components in jet engines of wide-body aircraft. This will help in lowering frictional heating as well as improving fuel efficiency and component life.

Praxair anticipates starting the contract in mid-2017.  

Praxair, Inc. Price and Consensus

Praxair, Inc. Price and Consensus | Praxair, Inc. Quote

Stocks to Consider

Praxair currently has a market capitalization of $33.9 billion.

Some better-ranked stocks in the chemical industry include Arkema S.A. (ARKAY - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Mitsubishi Chemical Holdings Corporation (MTLHY - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Arkema’s earnings estimates for 2017 improved over the past 60 days.

Kronos Worldwide’s estimates for 2017 increased over the past 60 days. It recorded an average positive earnings surprise of 72.01% for the last four quarters.

Mitsubishi Chemical Holdings witnessed positive revisions in earnings estimates for fiscal 2017 and fiscal 2018, over the past 60 days.

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