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PPG Industries Closes Remaining Fiberglass Operations Sale

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PPG IndustriesPPG completed the sale of its remaining fiberglass operations to Nippon Electric Glass Co. Ltd. (''NEG''), a leading fiberglass maker. Pre-tax proceeds from the divestiture were roughly $545 million, subject to closing adjustments.

NEG purchased PPG Industries' manufacturing plants in Chester, SC, and Lexington and Shelby, NC; and research-and-development and administrative operations in Shelby and in Harmar, PA. These businesses had net sales of around $350 million last year.

PPG Industries completed the sale of its European fiberglass operations to NEG and also divested its ownership interests in two Asian fiberglass joint ventures in 2016. The company also wrapped up the sale of its North American flat glass business last year.

With the sale of remaining fiberglass operations, PPG industries will report under two segments - Industrial Coatings and Performance Coatings.

PPG Industries has underperformed the industry for over the last six months. The company's shares have moved up around 2.6% over this period, compared with roughly 6.9% gain recorded by the industry.

PPG Industries expects modest global economic growth. Also, the company anticipates a higher level of earnings-accretive cash deployment in the second half of 2017 including acquisitions and share repurchases. The company announced that it will resume share repurchases from the third quarter.

PPG Industries is taking steps for growing organically. The company is also taking measures to lower costs. The company also remains committed to deploy cash on acquisitions and share repurchases. It plans to deploy $2.5-$3.5 billion cash for acquisitions and share repurchases in 2017 and 2018 combined and is now targeting the top end of that range at a minimum.

However, PPG Industries faces currency headwinds and macroeconomic challenges. Some of its end-markets including marine still remain sluggish. It is also exposed to volatility in raw materials and energy costs.

PPG Industries, Inc. Price and Consensus

PPG Industries, Inc. Price and Consensus | PPG Industries, Inc. Quote

PPG Industries currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the chemical space are The Chemours Company CC , Kronos Worldwide KRO and Air Liquide AIQUY . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Chemours has an expected long-term earnings growth of 15.5%.

Kronos Worldwide has an expected long-term earnings growth of 5%.

Air Liquide has an expected long-term earnings growth of 8.1%.

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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 Nasdaq, Inc.


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

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