Quanex Building Products Corporation
), leading manufacturer of engineered materials and components
for products in the fenestration industry, gained 5.7% after the
company signed an agreement with Aleris to sell Nichols Aluminum,
LLC for $110 million in cash on Feb 11. The transaction is
expected to close following customary regulatory approvals.
Nichols, a subsidiary of Quanex Building, is a producer of
aluminum sheet for the transportation, construction, machinery,
consumer durables and electrical markets in North America. The
sale includes two production plants in Davenport, Ia. and one
plant each in Decatur, AL and Lincolnshire, IL.
Cleveland, Ohio-based Aleris currently has six rolled facilities:
two in Ohio and one each in Kentucky, New Jersey, Virginia and
West Virginia. Upon completion of the transaction, Nichols will
become part of Aleris' Rolled Products North America business and
will add more than 500 Nichols employees to Aleris.
It is expected that the housing markets will continue to recover
with significant prospectsfor both organic and inorganic growth.
The aforementioned deal will allow Quanex Building to focus on
the Engineered Products segment and will help it to direct more
energy and capital to its window and door components business.
Quanex Building reported earnings of 28 cents per share in the
fourth quarter of fiscal 2013 (ended Oct 31, 2013). This marked a
rise of almost six times from 5 cents earned in the year-ago
quarter. Revenues also improved 17% year over year to $275
Quanex Building forecasts window shipments in the U.S. to
increase by 12% in 2014, with new construction rising 22% and
R&R (replacement and remodeling) expanding 6%. For fiscal
2014, the company expects revenues in the Engineered Products
Group (EPG) segment to rise 5%-6% from 2013.
However, due to uncertainty with regard to new warehouse rules
and their possible impact on net spreads, the company expects
2014 revenue growth for the Nichols group (Aluminum Sheet
Products Group) to be in the mid to high single-digit
Houston, Texas-based Quanex Building is a leading manufacturer of
engineered materials, components and systems that serves domestic
and international window and door OEMs (original equipment
manufacturers) through its Engineered Products and Aluminum Sheet
Quanex currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the sector include
Chicago Bridge & Iron Company N.V.
Orion Marine Group, Inc
). All these have a Zacks Rank #2 (Buy).
CHICAGO BRIDGE (CBI): Free Stock Analysis
QUANEX BLDG PRD (NX): Free Stock Analysis
ORION MARINE GP (ORN): Free Stock Analysis
USG CORP (USG): Free Stock Analysis Report
To read this article on Zacks.com click here.