On Apr 22, we issued an updated research report on
). While the coatings giant should gain from continued strength
across North American automotive and aerospace markets, it
remains exposed to a still soft European market, raw material
cost pressure and currency headwind.
PPG Industries' adjusted earnings for first-quarter 2014,
reported on Apr 17, topped the Zacks Consensus Estimate. Reported
profit jumped on continued strength in the company's coatings
business and its cost management initiatives. Revenues rose by
double digits on healthy momentum across aerospace and automotive
markets, but missed expectations. PPG Industries sees favorable
market conditions across major end-markets in 2014.
PPG Industries has a diversified business, both in terms of
products offered and geographical presence. It has a leading
position in several paints and coatings end markets.
PPG Industries is taking steps to grow its business
inorganically by making a number of acquisitions. The acquisition
) North American architectural coatings business has reinforced
its branded paint product offerings and scale in the North
American architectural paint market.
Moreover, PPG Industries is pursuing a $102 million business
restructuring focused on achieving cost synergies associated with
the North American architectural coatings business
PPG Industries also has an impressive record of returning cash
to shareholders through dividends and share buybacks. The company
recently raised its quarterly dividend by 10% to 67 cents per
share. Moreover, its Board recently authorized the repurchase of
shares worth $2 billion
However, PPG Industries may face macroeconomic challenges
going ahead. While the company is seeing modest improvements in
Europe of late, it may continue to face softness in the region
with sluggish economic activity and a still challenging demand
Moreover, PPG Industries remains exposed to raw material cost
pressure and unfavorable currency exchange swings, especially in
emerging markets. Moreover, some of the end markets such as
non-residential construction, marine coatings and European
architectural coatings remain sluggish.
Other Stocks to Consider
Other companies in the chemical industry worth considering
The Dow Chemical Co.
) with both carrying a Zacks Rank #2 (Buy).
AKZO NOBEL NV (AKZOY): Get Free Report
CELANESE CP-A (CE): Free Stock Analysis
DOW CHEMICAL (DOW): Free Stock Analysis
PPG INDS INC (PPG): Free Stock Analysis
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