PPG Industries Inc. (PPG - Free Report) said that it has inked a deal to sell its 50% ownership interests in its two PFG Fiber Glass joint ventures (PFG) to Nan Ya Plastics Corp. PPG Industries did not disclose the terms of the transaction and the deal is expected to close by the end of 2016.
Nan Ya Plastics Corp. is affiliated with Taiwan-based Formosa Plastics Group and it currently controls the other 50% ownership interest in the joint ventures.
PFG was formed as an equally-held JV between PPG and Nan Ya back in 1987, with a single production facility in Chia Yi, Taiwan. To meet the increasing demand, a second JV was formed to add a production facility in Kunshan, China in 2001.
PPG Industries’ adjusted earnings of $1.85 per share for the second quarter of 2016 improved 10.8% year over year. Sales in the quarter were fairly consistent with the prior-year quarter figure of $4,064 million. While earnings beat the Zacks Consensus Estimate, sales missed the same. The bottom line was primarily driven by the successful commercialization of innovative products, strong business and cost management as well as earnings-accretive cash deployment.
While PPG Industries is taking steps to cut costs and grow organically, it faces significant currency headwind. Moreover, the company faces macroeconomic challenges and some of its end-markets including heavy-duty equipment and marine still remain sluggish.
PPG Industries currently carries a Zacks Rank #4 (Sell).
Stock to Consider
Some better-ranked stocks in the chemical space include Innophos Holdings Inc. (IPHS - Free Report) , Innospec Inc. (IOSP - Free Report) , and E. I. du Pont de Nemours and Company .
Innophos Holdings sports a Zacks Rank #1 (Strong Buy). The company has expected earnings growth of 48.6% for the current year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Innospec also carrying a Zacks Rank #1, has posted positive earnings surprises in the trailing four quarters.
DuPont, a Zacks Rank #2 (Buy) stock, has also posted positive earnings surprises in the last four quarters.
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