06 February 2013 15:25 [Source: ICIS news]
Ferro said that the market for conductive pastes used in the manufacture of solar cells declined substantially since 2011 as the solar power panel industry struggles with overcapacity and falling prices.
As a result of the divestment, Ferro would eliminate operating losses associated with the solar business, it said.
“[The divestment] will eliminate approximately $17m (13m) of negative drag on operating earnings from the solar pastes business, allowing higher returns on invested capital and freeing up capital for investment in our core businesses,” said Peter Thomas, who took over as Ferro’s interim CEO last November.
“It also will eliminate a source of volatility in our business, allowing management to drive more consistent and predictable earnings,” Thomas added.
Ferro also announced that its expects 2013 adjusted earnings to be in the range of $0.25-$0.30/share. This compares with the $0.07-$0.12/share Ferro expects to report for 2012.
The earnings improvement this year would be driven by cost savings from restructuring, growth in key product lines, and savings from exiting the solar pastes business, the company said.
Ferro's shares were up by 4.3% or 22 cents, to $5.38/share, at 09:51 EST in trading on the New York Stock Exchange.
($1 = €0.74)
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