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Arconic (ARNC) to Sell Latin America Extrusions Business
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Arconic Inc. is divesting its Latin America Extrusions (LAE) business, a part of its Transportation and Construction Solutions segment. The LAE business mainly operates in Brazil.
The company noted that the ownership of the business will be transferred to a subsidiary of Hydro Extruded Solutions AS following customary regulatory and anti-trust reviews. The transaction is expected to consummate in first-half 2018.
Per the deal terms, Arconic will get roughly $10 million in cash for the LAE business, subject to working capital and other adjustments. The company will recognize a restructuring-related charge representing the loss on sale of roughly $40 million (post-tax) or 8 cents per share in fourth-quarter 2017. The charge is mainly associated with the non-cash impairment of the net book value of the LAE business.
The divestment of the LAE business is part of the company’s sustained initiatives to streamline its business portfolio, focus on its higher-margin products, reduce complexity and drive profitable growth.
Arconic has outperformed the industry it belongs to year to date. The company's shares have rallied around 32% over this period, compared with roughly 25.3% gain recorded by the industry.
Arconic, in October 2017, reaffirmed its full-year adjusted earnings guidance of $1.15-$1.20 per share. However, the company updated its revenue and capital expenditure outlook for 2017.
The company now sees revenues for 2017 in the range of $12.6-$12.8 billion (up from $12.3-$12.7 billion expected earlier). Arconic now expects capital expenditure to be roughly $600 million, compared with its prior view of up to $650 million.
Arconic holds strong positions in attractive markets. The company is seeing healthy demand trends in the aerospace market and is actively pursuing its aerospace expansion strategy. It is well placed to gain from major contract wins in aerospace. Arconic is also well placed to capture the growing demand for aluminum sheet stemming from the transition of the North American automotive industry to lightweighting.
Moreover, Arconic is focusing on cost reduction and productivity improvements across its businesses, which is likely to lend support to its bottom line in 2017.
Westlake has an expected long-term earnings growth of 10.6%. Its shares are up roughly 78% year to date.
Kraton has an expected earnings growth of 25.4% for the current year. The stock has gained around 63% year to date.
Kronos has an expected long-term earnings growth of 5%. Its shares are up roughly 111% year to date.
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It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Arconic (ARNC) to Sell Latin America Extrusions Business
Arconic Inc. is divesting its Latin America Extrusions (LAE) business, a part of its Transportation and Construction Solutions segment. The LAE business mainly operates in Brazil.
The company noted that the ownership of the business will be transferred to a subsidiary of Hydro Extruded Solutions AS following customary regulatory and anti-trust reviews. The transaction is expected to consummate in first-half 2018.
Per the deal terms, Arconic will get roughly $10 million in cash for the LAE business, subject to working capital and other adjustments. The company will recognize a restructuring-related charge representing the loss on sale of roughly $40 million (post-tax) or 8 cents per share in fourth-quarter 2017. The charge is mainly associated with the non-cash impairment of the net book value of the LAE business.
The divestment of the LAE business is part of the company’s sustained initiatives to streamline its business portfolio, focus on its higher-margin products, reduce complexity and drive profitable growth.
Arconic has outperformed the industry it belongs to year to date. The company's shares have rallied around 32% over this period, compared with roughly 25.3% gain recorded by the industry.
Arconic, in October 2017, reaffirmed its full-year adjusted earnings guidance of $1.15-$1.20 per share. However, the company updated its revenue and capital expenditure outlook for 2017.
The company now sees revenues for 2017 in the range of $12.6-$12.8 billion (up from $12.3-$12.7 billion expected earlier). Arconic now expects capital expenditure to be roughly $600 million, compared with its prior view of up to $650 million.
Arconic holds strong positions in attractive markets. The company is seeing healthy demand trends in the aerospace market and is actively pursuing its aerospace expansion strategy. It is well placed to gain from major contract wins in aerospace. Arconic is also well placed to capture the growing demand for aluminum sheet stemming from the transition of the North American automotive industry to lightweighting.
Moreover, Arconic is focusing on cost reduction and productivity improvements across its businesses, which is likely to lend support to its bottom line in 2017.
Arconic currently carries a Zacks Rank #3 (Hold).
Arconic Inc. Price and Consensus
Arconic Inc. Price and Consensus | Arconic Inc. Quote
Some Other Stocks to Consider
Better-ranked companies in the basic materials space include Westlake Chemical Corporation (WLK - Free Report) , Kraton Corporation and Kronos Worldwide, Inc. (KRO - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Westlake has an expected long-term earnings growth of 10.6%. Its shares are up roughly 78% year to date.
Kraton has an expected earnings growth of 25.4% for the current year. The stock has gained around 63% year to date.
Kronos has an expected long-term earnings growth of 5%. Its shares are up roughly 111% year to date.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>