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PPG Industries Closes Buyout of Global Coatings Producer

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PPG Industries, Inc. (PPG - Free Report) recently announced that it has completed the acquisition of Whitford Worldwide Company for an undisclosed price.

Elverson, PA-based Whitford, is a privately held company that specializes in producing wear-resistant, low-friction coatings for industrial applications in aerospace, automotive, energy and construction products.

In December 2018, PPG Industries had stated that the acquisition will enable it to boost its shareholders’ and customers’ value by enhancing product offerings, R&D capabilities and global market reach in the industrial coatings sector. 

The Whitford buyout is an addition to the PPG Industries’ robust industrial coatings solutions portfolio, while its R&D organization will leverage Whitford’s proficiency in fluoropolymer chemistry across markets. Moreover, Whitford’s customer-based high-touch business model complements PPG Industries’ business, enabling a seamless integration process.

PPG Industries delivered adjusted earnings of $1.15 per share in the fourth quarter of 2018, down around 3.4% from $1.19 in the year-ago quarter. Nevertheless, the figure beat the Zacks Consensus Estimate of $1.09.

Going forward, PPG Industries expects cost inflation, year-over-year unfavorable foreign currency translation and lower sales volume to impact performance in the first half of 2019. Based on these factors, the company projects first-quarter 2019 earnings per share (EPS) in the range of $1.18-$1.23.

The company envisions sales growth of 3-5% at constant currency for 2019. It also expects adjusted EPS growth of 7-10%. Moreover, the company expects to deliver at least $70 million in cost savings in 2019.

Zacks Rank & Key Picks

PPG Industries currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space include Kirkland Lake Gold Ltd. (KL - Free Report) , Ingevity Corporation (NGVT - Free Report) and Materion Corporation (MTRN - Free Report) , all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland has an expected earnings growth rate of 8.8% for 2019. The company’s shares have surged 115.7% in the past year.

Ingevity has an expected earnings growth rate of 17.9% for 2019. The company’s shares have improved 51.2% in a year’s time.

Materion has an expected earnings growth rate of 12.6% for 2019. Its shares have gained 17.7% in a year’s time.

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