Chemical company,
PPG Industries Inc.
(
PPG
) announced that it has entered into an agreement with a Chinese
company Henan Billions Chemicals Co., Ltd. (Billions). The company
signed a memorandum of understanding with Billions that involves
the licensing of chloride-based technology for titanium dioxide
(TiO2) facilities in China.
The chloride-based TiO2 manufactured by Billions will be used by
PPG for a number of end-use applications, including paints and
other coatings. As per the deal, the pigment produced under
the partnership will be available for sale to third parties.
The deal is also a part of PPG's initiative to expand its supply of
TiO2, which is a raw material used by the paints and coatings
companies to provide hiding, durability and whiteness
characteristics.
In April 2012, PPG released its first-quarter 2012 results. The
company's adjusted earnings were $1.81 per share in the quarter
compared with $1.40 in the year-ago quarter and the Zacks Consensus
Estimate of ?. However, profit (as reported) tumbled 94% year over
year to $13 million or 8 cents a share due to hefty one-time
charges.
Revenues rose 6% year over year to $3,752 million, beating the
Zacks Consensus Estimate of $3,696 million. PPG Industries
witnessed growth in each of its coatings businesses in the quarter.
The company's results were aided by strong domestic demand and
growth across emerging markets, partially offset by softness in
Europe.
Moving ahead, the company expects domestic growth in
second-quarter 2012 to be similar to that of the first quarter.
Further, PPG expects accelerated growth in the emerging markets,
buoyed by increased industrial activity in China. However, it feels
that the European market will continue to remain under
pressure. The company has initiated restructuring measures,
especially in its European operation, which is expected to result
in cost savings of 20-25 cents per share in the second half of
2012.
PPG competes with
EI DuPont de Nemours & Co.
(
DD
). Currently, the company holds a Zacks #3 Rank, which translates
into a Hold rating for the short-term.
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