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PPG Industries (PPG) Wraps Up $15M Investment at Sylmar Site

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PPG Industries, Inc. (PPG - Free Report) recently declared the completion of a $15-million investment at its Sylmar, CA manufacturing site. The investment is made toward expanding the development and production of aircraft transparency technologies for military aviation programs, including canopy transparencies for Lockheed Martin’s F-35 fighter jets.

PPG Industries will utilize state-of-the-art processing tools and new information technology infrastructure to enable superior digital manufacturing capabilities as part of the expansion.

The expansion will also enable the company to add more than 70 engineering, production and maintenance jobs, with some filled through partnership with local charitable organizations such as the Hope Gardens Family Center and Union Rescue Mission.

The site expansion is the most recent milestone in PPG Industries’ long-term partnership with Lockheed Martin, ever since the 1950s. It has completed the qualification and manufacturing process approvals essential to start production of canopy transparencies for the conventional take-off and landing (CTOL) F-35A and carrier variance (CV) F-35C. Qualification work in relation to the Short Take-Off and Vertical Landing (STOVL) F-35B is ongoing.

Shares of PPG Industries have rallied 38.3% in the past year compared with 28.5% rise of the industry.

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The company, in its last earnings call, stated that it expects higher aggregate input and logistics costs in the third quarter compared with the second quarter. It will continue to prioritize further selling price increases, which will likely offset raw material cost inflation before the end of 2021 on a run-rate basis.

PPG Industries also expects structural cost savings from restructuring actions of roughly $30 million year over year in the third quarter. Corporate expenses are expected to increase to $60 million in the third quarter from $52 million in the second quarter. Net interest expenses are expected between $28 million and $30 million.

The company also sees adjusted earnings for full year to be $7.4-$7.6 per share.

Zacks Rank & Key Picks

PPG Industries currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Nucor Corporation (NUE - Free Report) , Dow Inc. (DOW - Free Report) and Cabot Corporation (CBT - Free Report) .

Nucor has a projected earnings growth rate of around 455.7% for the current year. The company’s shares have surged 157.3% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dow has an expected earnings growth rate of around 403.01% for the current year. The company’s shares have gained 42.5% in the past year. It currently sports a Zacks Rank #2 (Buy).

Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have rallied 31.5% in the past year. It currently holds a Zacks Rank #2.


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