PPG Industries Seals U.S. Navy Contract Renewal - Analyst Blog

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Coatings giant PPG Industries ( PPG ) said that its protective and marine coatings ("PMC") unit has secured a contract from the U.S. Navy's Military Sealift Command ("MSC"), under which it will continue to offer coatings, solvents and technical services to the latter's global fleet of 110 ships.

The MSC fleet, set up in 1949, comprises over 20 classes of ships which offer transportation, combat logistics support and other services to the Department of Defense.

While PPG Industries supplied coatings to MSC earlier, this contract is the first to include the PSX brand of polysiloxane coatings. The contract also includes AMERCOAT 240 epoxy coatings for external surfaces and tanks and SIGMAGLIDE biocide-free foul release coatings. SIGMAGLIDE coatings boost hull smoothness to increase fuel economy for ships.

The contract renewal represents a significant milestone for PPG Industries' PMC business. It extends the company's commitment to cater to the U.S. Navy and other military services.

PPG Industries' earnings for fourth-quarter 2013, reported on Jan 16, topped the Zacks Consensus Estimate. Reported profit jumped on 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, and beat expectations. PPG Industries sees favorable market conditions across these end-markets in 2014.

However, PPG Industries' PMC unit was a weak spot in the fourth quarter as it saw weaker activity in the marine business. The company does not envision a significant uptick in marine sales until the latter part of this year.

PPG Industries has a diversified business, both in terms of products offered and geographical presence. While the company continues to face softness in Europe, it should gain from strength across North American automotive OEM and aerospace markets.

PPG Industries is a Zacks Rank #2 (Buy) stock.

Other companies in the chemical industry worth considering include L'Air Liquide SA ( AIQUY ), Northern Technologies International Corp. ( NTIC ) and LyondellBasell Industries NV ( LYB ). While both L'Air Liquide and Northern Technologies carry a Zacks Rank #1 (Strong Buy), LyondellBasell holds a Zacks Rank #2 (Buy).



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PPG INDS INC (PPG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AIQUY , LYB , NTIC , PPG

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