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Ashland to Hike Price of Maleic Anhydride in North America


Ashland Global Holdings Inc. ASH declared that it will raise the price of maleic anhydride sold in North America by 4 cents per lb. The price increase will be effective from Nov 1 or as contracts permit.

According to Ashland, the price hike is due to the spike in costs of major raw materials. The move is expected to ensure effective service to customers both in terms of quality and performance along with the ability to reinvest in the company’s product line.

Shares of Ashland have decreased 42.6% over a year, underperforming the industry’s 12.7% gain.

Ashland reported a net loss from continuing operations of $16 million or 26 cents per share in third-quarter fiscal 2017 (ended Jun 30), against a net income of $24 million or 38 cents in the year-ago period. Barring one-time items, adjusted earnings were 83 cents per share which beat the Zacks Consensus Estimate of 70 cents.

According to Ashland, the Specialty Ingredients unit recorded 7% year-over-year increase in revenues while sales of Composites grew by 20% on the back of disciplined pricing and robust volume expansions in various global end markets. Intermediates and Solvents unit also witnessed 9% increase in sales owing to continued recovery in butanediol pricing and improving global demand.

Ashland closed the acquisition of Pharmachem Laboratories, Inc., in May. The acquisition was a key contributor to Ashland’s sales in the third quarter. The company expects to achieve meaningful cost synergies from leveraging combined capabilities along with tax synergies resulting from Pharmachem integration.

Ashland Global Holdings Inc. Price and Consensus

Zacks Rank & Stocks to Consider

Ashland currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the chemical space are The Chemours Company CC, FMC Corporation FMC and Air Products and Chemicals, Inc. APD.

Chemours has expected long-term earnings growth of 15.5% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

FMC has expected long-term earnings growth of 11.3% and flaunts a Zacks Rank #1.

Air Products has expected long-term earnings growth of 12.1% and carries a Zacks Rank #2 (Buy).

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