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Ingevity to Boost Activated Carbon Extrusion in Covington

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Ingevity Corporation (NGVT - Free Report) said that it will boost the extrusion capacity at the facility in Covington, VA. The move is in response to consistent growth in global demand for its extruded activated carbon pellet products, which are mainly used in gasoline vapor emission control systems in motorcycles, cars, boats and trucks.  

The additional technology and equipment upgrades represent an investment of $15-20 million and will increase Covington facility’s total extrusion capacity by 10-20%. The company expects the new capacity to be operational by third-quarter 2019.

Per the company, the upgrades will include addition of a new pellet extrusion technology that will improve quality, throughput and consistency. Notably, this technology is currently used in activated carbon extrusion facility in Wujiang, China, and will also be implemented at the new facility in Changshu.

Ingevity’s Performance Materials division continues to witness higher demand for its advanced activated carbon pellet products for automotive applications. Moreover, the company is well placed to continue investing in production and technical capabilities to meet customers’ requirements as global regulations become more stringent.

Ingevity is a global leader in the automotive application with more than 900 million units of globally installed capacity and over decades of experience in the automotive market.    

The company has outperformed the industry  in the past three months. The company’s shares have gained 15.7% compared with roughly 0.4% rise of the industry.



Ingevity posted a profit of $46.7 million or $1.10 per share in second-quarter 2018, surging roughly 45% year over year. Adjusted earnings of $1.12 exceeded the Zacks Consensus Estimate of 99 cents.

The company’s second-quarter 2018 results gained from strong organic growth, contributions of Georgia-Pacific pine chemicals acquisition, excellent commercial and operational execution as well as strong productivity. Moreover, sales in the Performance Materials division rose around 7% to $96.1 million, supported by strong volumes of the company’s solutions geared to meet the U.S. EPA Tier 3 and California LEV III emission regulations.

Ingevity, in its second-quarter call, said that it remains optimistic about 2018 as it is witnessing the benefits of improving market conditions for its basic materials and high-value added technologies. The company increased the mid-point and narrowed the range of 2018 guidance for adjusted EBITDA to $302-$314 million from $293-$307 million. The company also backed its sales guidance in the range of $1.10 billion-$1.13 billion for 2018.

Ingevity Corporation Price and Consensus

 

Ingevity Corporation Price and Consensus | Ingevity Corporation Quote

Zacks Rank & Other Stocks to Consider

Ingevity currently sports a Zacks Rank #1 (Strong Buy).

A few other top-ranked stocks in the basic materials space are Huntsman Corporation (HUN - Free Report) , Trinseo S.A. (TSE - Free Report) and Celanese Corporation (CE - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Huntsman has an expected long-term earnings growth rate of 8.5%. Its shares have returned 23.3% in a year.

Trinseo has an expected long-term earnings growth rate of 12%. Its shares have surged 26.3% in a year.

Celanese has an expected long-term earnings growth rate of 10%. Its shares have gained 18.6% in a year.

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