On Sep 7, Zacks Investment Research updated the research report on paper and related products services provider Domtar Corporation .
Domtar recently ended second-quarter 2016 with a bang as it comfortably beat both earnings and revenue estimates. Sales in the quarter were $1,267 million, comfortably beating the Zacks Consensus Estimate of $1,258 million, while earnings were 61 cents per share, surpassing the Zacks Consensus Estimate of 19 cents.
Domtar is executing well its strategy of expanding its fiber-based business through acquisitions, strategic investments in capacity and the repurposing of assets. During second-quarter 2016, Domtar acquired the assets of Butterfly Health Inc. for an undisclosed amount. The strategic acquisition will expand the Personal Care segment of Domtar with complementary products. The transaction is further expected to augment Domtar’s global footprint in healthcare markets, particularly in Europe. Domtar also continues to streamline its network to build a more cost-competent distribution channel. Schlumberger Limited (SLB - Free Report) , a leading supplier of technology to the oil and gas industry, had invested in Domtar's CelluForce joint venture to explore the use of NanoCrystalline Cellulose to enhance the productivity of drilling operations in the industry. This is likely to reduce the input cost in the oil & gas industry, which is plagued by the slump in prices, and boost the company’s bottom line.
Domtar plans on investing $36 million for setting up a second generating unit at its Windsor (Quebec) Mill. This unit will have a generation capacity of 18 MW. It will help the company curb its production cost and improve energy efficiency at the mill. The company’s Windsor mill got its first power generating unit, with a capacity of 30 MW, in 2001. The power unit showcases the company’s willingness to innovate and provide sustainable development. The company’s investment strategy takes a holistic view of the rapidly evolving market and deploys a dynamic capital allocation approach to execute its growth strategy.
The company expects its paper business to benefit from the recently announced price hikes. It, however, expects some short-term pricing volatility in pulp. Lower maintenance activity and better productivity should boost results in Pulp and Paper. Personal Care results are expected to benefit from new customer wins, market growth and cost savings from the new manufacturing platform. Raw material unit costs are expected to increase moderately.
Domtar currently sports a Zacks Rank #1 (Strong Buy). A couple of other stocks in the same space worth considering include, Fibria Celulose S.A. and Sappi Limited (SPPJY - Free Report) . Both stocks carry a Zacks Rank #2 (Buy).
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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On Sep 7, Zacks Investment Research updated the research report on paper and related products services provider Domtar Corporation .
Domtar recently ended second-quarter 2016 with a bang as it comfortably beat both earnings and revenue estimates. Sales in the quarter were $1,267 million, comfortably beating the Zacks Consensus Estimate of $1,258 million, while earnings were 61 cents per share, surpassing the Zacks Consensus Estimate of 19 cents.
Domtar is executing well its strategy of expanding its fiber-based business through acquisitions, strategic investments in capacity and the repurposing of assets. During second-quarter 2016, Domtar acquired the assets of Butterfly Health Inc. for an undisclosed amount. The strategic acquisition will expand the Personal Care segment of Domtar with complementary products. The transaction is further expected to augment Domtar’s global footprint in healthcare markets, particularly in Europe. Domtar also continues to streamline its network to build a more cost-competent distribution channel. Schlumberger Limited (SLB - Free Report) , a leading supplier of technology to the oil and gas industry, had invested in Domtar's CelluForce joint venture to explore the use of NanoCrystalline Cellulose to enhance the productivity of drilling operations in the industry. This is likely to reduce the input cost in the oil & gas industry, which is plagued by the slump in prices, and boost the company’s bottom line.
Domtar plans on investing $36 million for setting up a second generating unit at its Windsor (Quebec) Mill. This unit will have a generation capacity of 18 MW. It will help the company curb its production cost and improve energy efficiency at the mill. The company’s Windsor mill got its first power generating unit, with a capacity of 30 MW, in 2001. The power unit showcases the company’s willingness to innovate and provide sustainable development. The company’s investment strategy takes a holistic view of the rapidly evolving market and deploys a dynamic capital allocation approach to execute its growth strategy.
The company expects its paper business to benefit from the recently announced price hikes. It, however, expects some short-term pricing volatility in pulp. Lower maintenance activity and better productivity should boost results in Pulp and Paper. Personal Care results are expected to benefit from new customer wins, market growth and cost savings from the new manufacturing platform. Raw material unit costs are expected to increase moderately.
Domtar currently sports a Zacks Rank #1 (Strong Buy). A couple of other stocks in the same space worth considering include, Fibria Celulose S.A. and Sappi Limited (SPPJY - Free Report) . Both stocks carry a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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