Ingevity Corporation (NGVT - Free Report) will expand its carbon activation capacity at its facility in Covington, VA. The move is aimed at meeting the growing global demand for pelletized carbon products that are mainly used in gasoline vapor emission control systems in trucks, cars, boats and motorcycles.
The expansion will include new processing, purification, activation and finishing equipment. The total activation capacity of the facility after expansion is likely to increase roughly 20%. Per the company, the project is expected to be operational by the fall of 2019 and is likely to represent an investment of $35-$40 million.
Ingevity continues to invest in its Performance Materials segment’s technical and production capabilities to address customer requirements. Moreover, investment in automotive applications continues to be the company’s highest capital allocation priority due to organic growth opportunities in the space.
Notably, the company is also constructing an activated carbon extrusion facility in Changshu, China. The project is expected to be operational by this fall. Moreover, it has an activation facility in Wickliffe, KY, a “honeycomb” scrubber joint venture plant in Waynesboro, GA, in addition to the two carbon activation plants in Covington and China.
Ingevity expects a considerable increase in global demand for its activated carbon products and technologies on the back of more stringent regulations for automotive gasoline vapor emissions control in Europe, China and other countries. Stringent emission standards require more advanced technology that increases the content of activated carbon products per vehicle.
Ingevity’s shares moved up 28.5% over the past year, significantly outperforming the industry’s 0.9% dip.
Ingevity logged a profit of $35.8 million or 72 cents per share in first-quarter 2018, rising roughly 56% from $23 million or 45 cents a year ago. Barring one-time items, earnings came in at 79 cents per share in the quarter, surpassing the Zacks Consensus Estimate of 61 cents.
Ingevity narrowed and increased the mid-point for full-year 2018 guidance for sales and adjusted EBITDA. It expects sales for the year in the range of $1.10-$1.13 billion compared with the prior view of $1.07-$1.13 billion. Adjusted EBITDA is expected to be between $293 million and $307 million compared with the prior view of $285-$305 million.
Zacks Rank & Other Stocks to Consider
Ingevity currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks worth considering in the basic materials space are The Chemours Company (CC - Free Report) , FMC Corporation (FMC - Free Report) and Westlake Chemical Corporation (WLK - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected long-term earnings growth rate of 15.5%. Its shares have gained 24.4% in a year.
FMC Corp has an expected long-term earnings growth rate of 14.3%. Its shares have moved up 15.8% in a year.
Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have rallied 91.9% in a year.
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