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PPG Wraps Up Sale of Interest in PFG Fiber Glass JVs

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PPG Industries (PPG - Free Report) has wrapped up the sale of its 50% ownership interest in its two PFG Fiber Glass joint ventures to Nan Ya Plastics Corp. that owned the other 50% stake in the joint ventures. PPG Industries received gross proceeds of around $170 million from the stake sale.

PFG provides electronic yarn fibers used in integrated electronic circuit boards as well as fiber glass reinforcement products for automotive applications. It was formed as an equally-held joint venture between PPG and Nan Ya back in 1987, with a single production facility in Chia Yi, Taiwan. To meet the rising demand, a second joint venture was formed to add a production plant in Kunshan, China in 2001.

PPG Industries’ shares closed roughly 1.5% lower at $95.19 last Friday.

PPG Industries recently acquired the remaining 50% ownership interest in PPG Univer S.p.A from its joint venture partner, Univer Italiana S.r.l. The financial terms of the transaction were not divulged. PPG Industries noted that the transaction is a key step in its efforts to strengthen its foothold in Europe and further grow its brands in Italy.

PPG Industries swung to a loss on a reported basis in the third quarter of 2016, hurt by sizable pension settlement charges. Adjusted earnings were in line with the Zacks Consensus Estimate while sales trailed expectations.   

PPG Industries expects a modest improvement in global demand and projects year-over-year earnings growth in fourth-quarter 2016 to be similar or modestly higher than that of the third quarter. It aims to reduce costs, particularly in the end-use markets that are expected to be the weakest, in the fourth quarter.

PPG Industries remains exposed to significant currency headwinds. Moreover, the company faces macroeconomic challenges and some of its end-markets including marine still remain sluggish.

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

Other Stocks to Consider

Better-ranked companies in the chemicals space include Innophos Holdings Inc , Koppers Holdings Inc. (KOP - Free Report) and Celanese Corporation (CE - Free Report) .

Innophos holds a Zacks Rank #1 (Strong Buy). The company has an expected earnings growth of 51.4% for the current year.

Koppers has an expected earnings growth of around 62.4% for the current year. The stock carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Celanese carries a Zacks Rank #2 (Buy) and has an expected earnings growth of around 9.5% for the current year.

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