Specialty materials and chemicals company Cytec Industries Inc. (CYT) intends to wrap up its $650 million share repurchase authorization by Jun 11. Post completion, Cytec is expected to have nearly 9 million shares repurchased for $650 million since the plan was announced on Oct 9, 2012. Cytec is using the proceeds from the sale of the Coating Resins business to fund the current share repurchase authorization.
Cytec’s Board has also approved a new share repurchase authorization of up to $200 million. Cytec expects this new buyback program to complete by the end of Sep 2013.
However, decisions regarding the quantity of shares to be repurchased and timing of such repurchases will depend on the prevailing market conditions and other corporate considerations. The share repurchase program will be executed as per the norms of the federal securities laws and can be suspended or discontinued at any time.
The move adopted by Cytec testifies its commitment to boost shareholders’ value while retaining its strong financial position. The company bought back 1,203,499 shares worth $89.7 million in the first quarter of 2013. Roughly $460.4 million shares remained authorized under the share repurchase program as of Mar 31, 2013, out of the $650 million share repurchase authorization.
Cytec reported its first-quarter 2013 results on Apr 18. The company reported adjusted (excluding special items) earnings from continuing operations of 75 cents per share in the quarter, missing the Zacks Consensus Estimate of 86 cents.
Cytec posted a net profit of $33.5 million (or 73 cents per share) in the reported quarter, down roughly 37% from net earnings of $53.1 million (or $1.14 a share) recorded in the year-ago quarter. Revenues increased roughly 26% year over year to $477.4 million in the reported quarter, but missed the Zacks Consensus Estimate of $494 million.
Cytec cut its adjusted diluted earnings per share estimate for 2013 to a range of $4.50 to $4.75 from the previous guidance of $4.70 to $4.95. The company remains optimistic about both its short-term and long–term growth opportunities despite there being some risk associated with the global economy, which would mostly have a negative impact on the Industrial Materials segment.
Cytec currently maintains a Zacks Rank #4 (Sell).
Other companies in the chemical industry having favorable Zacks Rank are Shin-Etsu Chemical Co., Ltd. (SHECY), Celanese Corporation (CE) and Methanex Corporation (MEOH). All of them hold a Zacks Rank #1 (Strong Buy).
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