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Innospec Initiates Site Construction for DRA Manufacturing

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Innospec Inc. IOSP has started construction on its new facility to make Drag Reducing Agents (DRAs). The site, located at Pleasanton, TX, is an extension of the existing Innospec site. The project is well advanced and the company expects beneficial production in the second half of 2018.

Besides being a fast-growing, exciting, cutting-edge technology, DRAs offer improved productivity as well as low costs for customers. This latest addition is complementary to the company’s existing portfolio that will allow it to serve its customers globally.

These products reduce the turbulent flow of liquids in a cost-effective manner to improve pipeline throughput and reduce the energy required for pumping. The technology can be applied to crude oils and to fuels including diesel.

Shares of Innospec have gained 22.3% over a year, outperforming the industry’s 15% gain.

The company reported adjusted earnings of $1.02 per share for the first quarter of 2018, beating the Zacks Consensus Estimate of 98 cents.  Revenues went up 23% year over year to $360.7 million in the quarter.

Innospec is seeing healthy customer activity across all of its core businesses. The company said that it will remain focused on further improving margins in Performance Chemicals and other strategic businesses to boost profitability. Innospec expects its margin-improvement programs to deliver enhanced profitability later this year.

Innospec Inc. Price and Consensus

Innospec Inc. Price and Consensus | Innospec Inc. Quote

Zacks Rank & Other Stocks to Consider

Innospec is a Zacks Rank #2 (Buy) stock.

Some other top-ranked companies in the basic materials space worth considering are FMC Corporation FMC, Huntsman Corporation HUN and The Chemours Company CC. All three stocks sport a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

FMC Corp has an expected long-term earnings growth rate of 13.6%.  Its shares have gained around 22.4% over a year.

Huntsman has an expected long-term earnings growth rate of 8.3%.  Its shares have moved up around 24.8% over a year.

Chemours has an expected long-term earnings growth rate of 15.5%.  Its shares have gained around 20.2% over a year.

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