PPG Industries Inc. PPG has declared force majeure on the production of architectural, residential and specialty glass products for customers in the western U.S. and Canada. The company took this action because of unexpected mechanical production issues at its Fresno, CA, flat glass manufacturing plant.
Production is prohibited at the facility due to the mechanical issues, impacting the company’s ability to meet customers’ demands. PPG Industries is working toward restoring normal operations by solving the mechanical issues at the facility. The company stated that it cannot provide a timeline for the restoration of production.
PPG Industries is trying to lessen the problems caused to the customers by supplying glass from other manufacturing plants.
PPG Industries has a diversified business and a leading position in several paints and coatings end markets. Its adjusted earnings per share for second-quarter 2015 topped the Zacks Consensus Estimate. However, sales fell short of expectations due to unfavorable currency translations. The company also saw a decline in its profit, hurt by hefty restructuring charges.
Revenues from the company’s Glass segment dropped 3% in the second quarter to $279 million, as currency headwinds more than offset pricing gains. Glass volumes were flat due to the sale of a production unit in 2014. Fiber glass volumes were flat year over year.
PPG Industries is looking for opportunities to grow its businesses strategically while controlling costs. Healthy momentum across automotive and aerospace markets and synergies of acquisitions are expected to support its results moving ahead.
PPG Industries currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the chemical space are Innospec Inc. IOSP, Air Products & Chemicals Inc. APD and Akzo Nobel N.V. AKZOY. While Innospec sports a Zacks Rank #1 (Strong Buy), both Air Products and Akzo Nobel carry a Zacks Rank #2 (Buy).
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