Ashland Global Holdings Inc. (ASH - Free Report) is set to raise the prices of maleic anhydride in North America by 2 cents per pound. The price increase will be effective on all orders shipped on or after Oct 1, or as contracts permit.
According to Ashland, the price hike is mainly driven by increases in key raw materials. 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.
Shares of Ashland have declined 3.6% in last three months, underperforming the industry’s 1% dip.
Ashland, during third-quarter fiscal 2017 (ended Jun 30), witnessed a 7% year-over-year increase in revenues of the Specialty Ingredients unit while 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.
In May 2017, Ashland 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 fiscal 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 Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , Kronos Worldwide Inc. (KRO - Free Report) and Smurfit Kappa Group plc . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Sociedad Quimicahas an expected long-term earnings growth rate of 32.5%.
Kronos Worldwide has an expected long-term earnings growth rate of 5%.
Smurfit Kappa has an expected long-term earnings growth rate of 4%.
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