PPG Industries Inc.
) announced that it has inked a deal with China-based automotive
glass maker Fuyao Glass America Inc. to sell all the assets of its
Mt. Zion, IL, glass manufacturing facility to the latter. The
financial terms of the deal were not disclosed. The sale is
expected to close in the third quarter of 2014.
The Mt. Zion facility manufactures glass for use in residential and
commercial construction markets. PPG Industries will operate the
plant for another year and will produce SUNGATE coated glass and
clear glass. These products will be eventually produced at PPG's
other North American float glass manufacturing sites.
PPG Industries' plan to sell off the Mt. Zion facility is in sync
with its strategy to focus on its higher-technology, coated glass
capabilities for residential and commercial construction
application. Glass coatings technology remains PPG's primary growth
factor and the company intends to make further investments toward
the improvement of its current capacity and to expand its overall
technical capabilities to manufacture more advanced products.
Fuyao has been PPG's business partner for 13 years and its
geographic proximity to major automotive manufacturers makes the
Mt. Zion facility well suited for its automotive glass operation.
Fuyao plans to rebuild and retrofit the facility's two production
lines to manufacture automotive glass.
Recently, PPG industries released its second-quarter 2014 results.
The company topped earnings expectations in the quarter on healthy
results across major markets, notably Europe where earnings jumped
28%. Cost reduction measures and strength in the automotive OEM
coatings market supported the results.
Profit from continued operation (as reported) was $393 million or
$2.80 per share in the second quarter, climbing roughly 24% from
$318 million or $2.19 per share posted a year ago. Consolidated
profit rose 13% year over year to $386 million or $2.75 per share.
The improvement was led by strong performance in Europe as PPG
gained from gradual economic recovery in the region.
Barring one-time items, the company raked in earnings from
continuing operations of $2.83 a share in the quarter that topped
the Zacks Consensus Estimate of $2.79. The adjusted earnings
exclude pension-related costs and acquisition charges.
Revenues moved up 5% year over year to $4,082 million in the
reported quarter. It fell short of the Zacks Consensus Estimate of
$4,097 million. The company benefited from higher volumes across
major regions in the quarter.
PPG Industries is a Zacks Rank #3 (Hold) stock.
Other companies in the chemical space worth considering include
Marrone Bio Innovations, Inc.
LyondellBasell Industries NV
).While Marrone Bio Innovations sports a Zacks Rank #1 (Strong
Buy), LyondellBasell and Ashland hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
PPG INDS INC (PPG): Free Stock Analysis Report
ASHLAND INC (ASH): Free Stock Analysis Report
LYONDELLBASEL-A (LYB): Free Stock Analysis
MARRONE BIO INV (MBII): Free Stock Analysis
To read this article on Zacks.com click here.