PPG Industries, Inc. (NYSE:PPG) is increasing investment in the automated dispense cell manufacturing of paint and related coatings for the automotive parts and accessories decorative (APAD) space. However, financial details have been kept under wraps.
Notably, dispense cell technology enables the company to accelerate production of paint batches for original equipment manufacturers (OEMs) vehicle and component suppliers. Further, the technology allows the drawing of coating components automatically in the correct proportions from storage vats and finally mixing directly in shipping containers. Hence, this technology simplifies and boosts efficiency of the coatings manufacturing process. It also lowers product variability and increases batch consistency in color, application and appearance as well as significantly reduces customers’ lead times.
The company recently made APAD investments in Russia and Germany, and dispense cells are also operational at the company’s APAD facilities in Oak Creek, WI; Valladolid, Spain; and Tianjin, China. In addition to that, PPG Industries recently launched an APAD dispense cell operation at Mexico coatings facility. Moreover, in Sriperumbudur, India, the company will start production on an additional cell in 2019.
Per the company, the investment is in sync with its commitment to the APAD space and enables it to meet customer demand while increasing color accuracy and product consistency. PPG Industries strives to provide highest yield rate by lowering risk for automotive parts and accessories customers.
PPG Industries has outperformed the industry in the past year. The company’s shares have lost around 12.4% compared with the 24% decline of the industry.
In its third-quarter earnings call, PPG Industries stated that it expects normal business seasonality in the fourth quarter. It also expects overall global economic growth to remain positive. The company witnessed higher industrial production volatility and inconsistency in emerging region growth rates in the third quarter and expects this to persist in the fourth quarter. The company projects fourth-quarter earnings per share of $1.03-$1.13.
PPG Industries’ Performance Coatings segment sales rose more than 2% at constant currency in the third quarter as higher selling prices more than offset the modest decline in sales volumes. Meanwhile, its Industrial Coatings segment saw a year-over-year uptick in sales. However, net income at both the segments declined year over year due to raw material and logistics cost inflation.
PPG Industries, Inc. Price and Consensus
Zacks Rank & Stocks to Consider
PPG Industries currently carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the basic materials space are Nexeo Solutions, Inc. (NASDAQ:NXEO) , CF Industries Holdings, Inc. (NYSE:CF) and The Mosaic Company (NYSE:MOS) .
Nexeo has an expected long-term earnings growth rate of 30.6% and a Zacks Rank #1 (Strong Buy). The company’s shares have gained 4.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
CF Industries has an expected long-term earnings growth rate of 6% and a Zacks Rank #1. The company’s shares have gained 1.3% in the past year.
Mosaic has an expected long-term earnings growth rate of 7% and a Zacks Rank #2 (Buy). The company’s shares have rallied 24% in the past year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
PPG Industries, Inc. (PPG): Free Stock Analysis Report
The Mosaic Company (MOS): Free Stock Analysis Report
NEXEO SOLUTIONS (NXEO): Free Stock Analysis Report
Original post
Zacks Investment Research