(Updates with closing share price in third paragraph.)
Oct. 21 (Bloomberg) -- Cytec Industries Inc., a maker of reinforced plastics used in airplanes, gained the most in 15 months after saying its considering options for its largest business unit because of slowing global demand.
Cytec is “reviewing all options” for its paint-making segment, known as the coating resins unit, Chairman and Chief Executive Officer Shane Fleming said today on a conference call. Fleming declined to specify what the options may be, saying the company will provide more detail in January.
Cytec rose 15 percent to $42.90 at the close in New York, the biggest gain since July 2010. The company, based in Woodland Park, New Jersey, is trying to boost earnings from the unit by closing a plant in Brazil, exiting underperforming product lines and developing new waterborne and radiation-cured coatings, Fleming said.
Coating resins, which accounted for 52 percent of the company’s revenue last year, posted a 7.7 percent drop in third- quarter earnings as sales volumes fell 10 percent from a year earlier, led by Europe, Cytec said today in a presentation. A similar sales decline is likely in the current quarter as industrial customers cut coating purchases, Fleming said.
“Given the potential for a protracted slowdown in demand in a number of our major coatings markets, we are not confident that these ongoing initiatives will be sufficient to yield the sustained improvements in profitability that we require from this business,” Fleming said.
The coatings unit will report an operating loss of $5 million to $8 million in the fourth quarter, reducing the segment’s full-year earnings to $57 million to $60 million, Fleming said. The company previously forecast earning as much as $80 million from coatings this year, he said.
Cytec in February completed the sale of a chemical business unit to HIG Capital LLC for $180 million.
--Editors: Tina Davis, Charles Siler
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