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Georgia Gulf Corporation (GGC) is a leading North American manufacturer and marketer of two integrated chemical product lines, chlorovinyls and aromatics.
In the third quarter of 2008, Georgia Gulf reported net sales of $818.6 million compared to net sales of $815.3 million for the third quarter of 2007. The increase in sales is primarily due to higher prices for vinyl resins and caustic soda, partially offset by difficult housing and construction related market conditions in the U.S and the disruption caused by hurricanes Gustav and Ike.
Georgia Gulf reported a net loss of $17.4 million or $0.50 per diluted share for the third quarter of 2008, compared to breakeven net income during the same quarter in the previous year. The net loss for the third quarter of 2008 was negatively impacted by approximately $18.1 million from hurricanes Gustav and Ike, or $0.53 per diluted share.
Demand for the company's products is expected to remain weak due to the downturn in the US housing and auto markets. Moreover, the company may need to sell its assets to comply with the debt covenants. As a result, we have a Sell rating with a target of $1.50.
Read the full analyst report on GGC
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