PPG Industries, Inc. (NYSE:PPG) won a contract from Bell Helicopter, a unit of Textron Inc. (NYSE:TXT) . Per the contract, PPG Industries will produce heated pilot and co-pilot windshields for the Bell 525 Relentless commercial helicopter. The windshields will be made available for customer specification for helicopters operating in hilly regions and cold environments and for off-shore rescue operations.
PPG Industries demonstrated the functioning of Aircon heating system and provided a cross-section sample of the same to Bell Helicopter. Bell Helicopter approved PPG Industries’ design for the composite windshields by completing the critical design review.
The windshield will have an outboard ply of stretched acrylic with a scratch-resistant coating and an inboard polycarbonate ply which enhance the product’s strength. The windshields can withstand the impact of a 2.2-pound bird at 185 knots — Bell Helicopter’s bird-strike requirement.
PPG Industries, which is among the prominent chemical companies along with Air Products and Chemicals Inc. (NYSE:APD) and Eastman Chemical Company (NYSE:EMN) , witnessed a roughly two-fold year-over-year jump in net earnings from continuing operations to $184 million or 72 cents per share in fourth-quarter 2017. Adjusted earnings of $1.19 per share surpassed the Zacks Consensus Estimate of $1.18.
Net sales rose around 8% year over year to $3,682 million and came ahead of the Zacks Consensus Estimate of $3,605 million. The company gained from favorable currency translation in the quarter.
For 2018, PPG Industries expects acquisitions to contribute to sales roughly $125 million. The company recently agreed to acquire Netherlands-based leading architectural paint and coatings wholesaler, ProCoatings. Through its network of 23 multi-brand stores, ProCoatings distributes a large portfolio of professional paint brands across the Netherlands. The transaction is expected to close in first-quarter 2018, subject to customary closing conditions.
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To improve its 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 expected 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.
However, the company is exposed to raw materials cost pressure. PPG Industries is seeing higher raw materials costs and implementing pricing strategies to offset the impact of inflation. The company anticipates raw material inflation to continue through first-half 2018.
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PPG Industries, Inc. (PPG): Free Stock Analysis Report
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