The global leader in distribution and manufacture of activated carbon, Calgon Carbon CorporationCCC , has been awarded about $15.4 million by the U.S. Government under the Defense Production Act (DPA) Title III Program.
The funding was awarded for mitigating supply chain risk associated with the manufacture of activated carbon products used in military and personal protection collective protection equipment.
The award will enable Calgon Carbon to construct manufacturing facilities at its Pearl River plant in Bay St. Louis, MS. This will ensure uninterrupted supply of the critical military materials. At present, Calgon Carbon's Neville Island plant near Pittsburgh, PA, solely produced these U.S. Department of Defense (DoD) materials.
The project's construction is expected to start in Jan 2018, following the completion of engineering and permitting activities. The project is likely to be operational by Mar 2019 and the construction works will generate around 25 jobs, while the operation of the new facility will add 18 full-time jobs in Mississippi.
Calgon Carbon's shares have dipped around 0.7% over the past three months, underperforming the Zacks categorized Pollution Control industry's increase of 0.6%.
Despite some recovery of late, Calgon Carbon's industrial end-markets are expected to remain somewhat sluggish in the near term. The company is also seeing weak demand for activated carbon in specific markets. Demand in Europe, especially in the UK portable water market, is expected to remain sluggish in the near term. Market uncertainties are expected to sustain moving ahead.
Also, currency remains a headwind for the company. Unfavorable currency translation had a $1.9 million negative impact on its top line in first-quarter 2017. The company sees an unfavorable impact of around $1.5 million for the second quarter of 2017.
Calgon Carbon Corporation Price and Consensus
Calgon Carbon currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked companies in the basic materials space include Huntsman Corporation HUN , ArcelorMittal MT and The Chemours Company CC . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 stocks here .
Huntsman has an expected long-term earnings growth of 7%.
ArcelorMittal has an expected long-term earnings growth of 11.4%.
Chemours has an expected long-term earnings growth of 15.5%.
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