Cytec Climbs After Profit Tops Estimates on Coatings Gain
Cytec Inc. (CYT), the second-largest maker of carbon-fiber materials for airplanes, rose the most in seven weeks after posting quarterly profit that beat analysts’ estimates on gains in its coatings and separations units.
Cytec climbed 3.9 percent to $61.14 in New York, the biggest gain since May 21.
Profit in the second quarter was $1.50 to $1.55 a share, excluding costs for restructuring, acquisitions and divestitures, Woodland Park, New Jersey-based Cytec said today in a preliminary earnings statement. That exceeds the $1.14 average of five analysts’ estimates compiled by Bloomberg. The company plans to announce full results on July 19.
“Strong performance” in the coatings resins and process separation businesses was the main driver in the quarter, Cytec said.
Higher prices and sales in the coatings unit, which Cytec is trying to sell, may have contributed as much as 80 percent of the earnings that beat estimates, Laurence Alexander, a New York-based analyst at Jefferies & Co., said in a research note today.
“Coating resins appears off to a very strong start in the first half, which, in our opinion, should help potential buyers become more comfortable with the normalized earnings power of this business,” Michael Sison, a Cleveland-based analyst at KeyBanc Capital Markets, said today in a note.
Sison said coatings mostly benefited from lower raw- material costs, particularly propylene, rather than improved demand. He rates the shares buy and Alexander rates them hold.
JPMorgan Chase & Co. is assisting with the sale of the coating resins business, which makes chemicals used in paint. The separations unit provides miners with chemicals used to separate metals from ore.
To contact the reporter on this story: Jack Kaskey in Houston at email@example.com
To contact the editor responsible for this story: Simon Casey at firstname.lastname@example.org