Ashland Global Holdings Inc. (ASH - Free Report) announced that it will raise the price of gelcoat products in Europe, the Middle East and Africa (EMEA) by €75 per metric ton. The price increase will be effective from Sep 1 or as soon as possible thereafter as contracts permit.
According to Ashland, continued spike in costs of key raw materials including isophthalic acid, titanium dioxide and neopentyl glycol led to the price hike. The move is expected to ensure effective service to customers in terms of quality and performance along with the ability to reinvest in the company’s product line. The company declared an increase in the prices of maleic anhydride in North America by 2 cents per pound.
Ashland, during third-quarter fiscal 2017 earnings call, announced that it has made significant progress with its pricing initiatives and expects year-over-year price gains to be more than raw material cost increases in the fiscal fourth quarter.
Shares of Ashland have declined 7.5% in last three months, underperforming the industry’s 2% dip.
Ashland reported a net loss from continuing operations of $16 million or 26 cents per share in third-quarter fiscal 2017 (ended Jun 30), against a net income of $24 million or 38 cents in the year-ago period. Barring one-time items, adjusted earnings were 83 cents per share which beat the Zacks Consensus Estimate of 70 cents.
According to Ashland, the Specialty Ingredients unit recorded a 7% year-over-year increase in revenues while the sales of Composites grew by 20% on the back of disciplined pricing and robust volume expansion in various global end markets. Intermediates and Solvents unit also witnessed a 9% increase in sales owing to continued recovery in butanediol pricing and improving global demand.
Ashland, in May 2017, closed the acquisition of Pharmachem Laboratories, Inc., a leading provider of quality ingredients to wellness and health industries and high-value differentiated products including flavor and fragrance houses. The acquisition was a key contributor to Ashland’s sales in the third quarter. The company expects to achieve meaningful cost synergies from leveraging combined capabilities along with tax synergies resulting from Pharmachem integration.
Ashland currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the basic materials space are The Chemours Company (CC - Free Report) , POSCO and Kronos Worldwide Inc. (KRO - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Chemours has expected long-term earnings growth rate of 15.5%.
POSCO has expected long-term earnings growth rate of 5%.
Kronos has expected long-term earnings growth rate of 5%.
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