Sign up USA
Proactive Investors - Run By Investors For Investors

Natural disasters and higher raw materials prices weigh on Axalta’s full-year outlook

The paint specialist now expects underlying earnings to come in at between US$870-US$890mln this year, on revenues of between US$1.08-US$1.1bn
car paint
Net sales are now expected to grow by between 6-7% to between US$1.08-US$1.1bn this year

Axalta Coating Systems Ltd (NYSE:AXTA) opened in the red on Monday after the paint specialist trimmed its full-year sales growth and adjusted underlying earnings guidance.

Underlying earnings (EBITDA) are now expected to come in at between US$870-US$890mln in 2017, while full-year net sales are expected to grow by between 6-7% to between US$1.08-US$1.1bn.

Only in August Axalta told investors it expected sales growth of 7-8% and adjusted underlying earnings of between US$940-US$970mln.

The Philadelphia-based said several reasons were to blame for the weaker outlook, including higher raw material prices and the impact of the recent natural disasters.

“We have seen and expect moderate effects on our business from recent hurricanes and the earthquake in Mexico, largely in terms of lost near-term volume opportunity,” said chairman and chief executive Charles Shaver.

“We believe that much of this impact will be made up during the course of 2018, and hence see these impacts as largely transitory.”

He added: “We also continue to see impacts across coatings markets from tight supply conditions for raw material inputs, and given time lags to recovery via pricing adjustments, we have factored in a wider price-cost gap into our 2017 outlook.

“We expect to close the gap caused by raw material price pressure over the coming year.”

The stock was down 4.5% to US$29.16 on Monday morning.

View full AXTA profile View Profile

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You understand that the Company receives either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate.

You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Copyright © Proactiveinvestors.com, 2017. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use