PPG Industries, Inc. (NYSE:PPG) will raise prices for select coatings products for Automotive OEM customers in the Americas. The price hike will be effective immediately or as contracts permit.
The company is taking the pricing actions to mitigate rising raw material and operating costs. It is currently witnessing excess demand for raw materials outpacing the supply capacity of industries providing materials for paints and coatings. Additionally, the company has seen increased freight and logistics costs for the past six months due to oil prices increasing nearly 40% over the past nine months.
Shares of the company have moved up around 11% over a year, underperforming the roughly 17.6% growth recorded by its industry.
To improve cost structure, PPG Industries is pursuing significant restructuring actions that are mainly focused on regions and end-use markets with the weakest business conditions. The restructuring activities are projected to deliver around $125 million in annual savings with roughly $50 million of savings already realized in 2017 and another $45-$50 million expected in 2018.
During the fourth-quarter call, PPG Industries stated that it is committed toward deploying at least $2.4 billion of cash in 2018 on acquisitions and share repurchases as part of its earlier communicated goal of deploying $3.5 billion in 2017 and 2018 combined.
PPG Industries is also implementing appropriate pricing strategies to offset the impact of raw materials cost inflation. The company anticipates raw material inflation to continue through first-half 2018.
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