Back to top

Analyst Blog

PPG Industries Inc (PPG - Analyst Report) recently said that it is in talks with optical lenses giant Essilor International regarding the future of their joint venture, Transitions Optical. The joint venture, which was formed in 1990, is a leading supplier of photochromic lenses to optical makers globally.

PPG Industries holds a 51% stake in the joint venture with Essilor owning the balance. Transitions Optical represented a meaningful portion of PPG Industries’ Optical and Specialty Materials division revenues last year.

The Pennsylvania-based coatings giant hinted that its ongoing discussions with Essilor may lead to a structural change in the joint venture or possible stake sale. These potential outcomes may result from a negotiated transaction or exercise of contractual rights as defined by the joint venture agreement. PPG Industries said that the discussions may continue over the next several months.

PPG Industries, on January 14, reported higher revenues and profit for fourth-quarter 2012. Its adjusted earnings matched the Zacks Consensus Estimate while sales beat. Profit rose 5% year over year on the back of the company’s cost-saving measures. The company witnessed strong growth in its North American automotive OEM coatings business in the quarter.

Revenues from the company’s Optical and Specialty Materials segment rose 5% in the fourth quarter. The division accounted for roughly 8% of its total sales for 2012.

PPG Industries has a diversified business, both in terms of products offered and geographical presence. It has a leading position in several paints and coatings end markets. The company looks to grow its businesses strategically along with controlling costs.

PPG Industries is also taking steps to grow its business inorganically by making a number of acquisitions. Moreover, it is pursuing restructuring of its European operation, which is expected to fetch meaningful cost savings this year.

However, the European market is expected to remain under pressure and raw material inflation and currency headwinds remains concerns for the company.

PPG Industries, which competes with DuPont Performance Coatings segment of DuPont (DD - Analyst Report), retains a short-term Zacks Rank #2 (Buy). Currently, we have a long-term Neutral recommendation on the stock.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 27.00 +10.25%
CANADIAN SO… CSIQ 38.34 +8.18%
BANCO DO BR… BDORY 16.78 +8.05%
CENTURY ALU… CENX 26.97 +7.97%
WILLDAN GRO… WLDN 11.38 +5.86%