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Univar Announces Extension of Distribution Deal With Eastman

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Univar Inc. announced that it was selected for the distribution of Eastman Turbo Oils and Skydrol aviation hydraulic fluids to the military aviation market.

The agreement enables Univar to leverage its expertise in the military chemicals, oils and lubricant markets, which will expand the accessibility of Eastman Turbo Oils and Skydrol.

Notably, Skydrol is used in commercial aerospace service hydraulics as a primary fluid. Its fire-resistance characteristics along with ability to retain a low viscosity auger well with aircraft conditions of low temperatures at high altitudes.

Moreover, Eastman Turbo Oils are designed to address the needs of demanding turbine engines and include products that meet the high load-carrying capacity of helicopter transmission systems.

Univar’s shares have lost 35.9% in the past year compared with the 45.6% decline recorded by its industry.


 

In second-quarter earnings call, the company revised its adjusted EBITDA forecast considering lower-than-expected demand for chemicals and ingredients, higher expected net cost synergies from Nexeo and outlook from many supplier partners. It now expects adjusted EBITDA between $725 million and $740 million compared with the previous view of $740 million and $760 million.

Univar is progressing well with the integration of Nexeo's chemical distribution customers, suppliers and support functions. The company now sees higher cost-saving synergies from Nexeo than what it had originally anticipated. It has raised guidance for annual net synergy from $100 million to $120 million (before tax). Univar expects to achieve $20 million in net synergies this year, higher than the initial expectations of $10 million.

Zacks Rank & Key Picks

Univar currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation (KGC - Free Report) , Alamos Gold Inc (AGI - Free Report) and Arconic Inc , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an expected earnings growth rate of 150% for 2019. The company’s shares have surged 68% in the past year.

Alamos Gold has projected earnings growth rate of 320% for the current year. The company’s shares have rallied 55.3% in a year’s time.

Arconic has an estimated earnings growth rate of 50% for the current year. Its shares have moved up 14.4% in the past year.

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