Ferro (FOE) Sells Solar Pastes Business; Sees FY12, FY13 EPS Ahead of Street

February 6, 2013 8:38 AM EST
Ferro Corporation (NYSE: FOE) has sold assets related to its solar pastes business to Heraeus, a privately owned global precious metals and technology company based in Hanau, Germany. As announced on October 9, 2012, the Company had decided to explore strategic options for the solar pastes business in an effort to eliminate the negative impact from the business on earnings and cash flow. The market for conductive pastes used in the manufacture of solar cells has declined substantially since 2011 as the solar power panel industry has struggled with overcapacity and falling prices. As a result of the transaction, the Company will eliminate operating losses associated with the solar business. Terms of the transaction were not disclosed.

Since assuming his current position with the Company on November 12, 2012, Mr. Thomas has accelerated and expanded initiatives to drive efficiencies across the global enterprise. He commented, “We have substantial restructuring experience, including in Europe, and we are using that experience to create value for our shareholders. In addition to the savings from the solar pastes divestiture, we expect our cost savings initiatives to generate annual savings of $25 million to $30 million in 2013 and more than $50 million in 2014. Our focus on operating efficiency will be relentless and we are planning even greater cost savings in 2015.” Total costs over the 2013–2014 period associated with these initiatives are expected to be in excess of $50 million. Restructuring actions at certain sites are subject to required consultations with employee representatives and other local legal requirements.

J.P. Morgan acted as financial advisor to Ferro on the solar pastes transaction.

For the full year 2012, the Company confirms that it expects adjusted earnings per diluted share of $0.07 to $0.12.

*** The Street sees FY12 EPS of $0.06.

Ferro also announced today that adjusted earnings for 2013 are expected to be in the range of $0.25 to $0.30 per diluted share. The earnings improvement in 2013 is expected to be driven by a number of factors, including cost savings from restructuring activities, growth in key product lines, and savings associated with the Company’s exit from the solar pastes business.

*** The Street sees FY13 EPS of $0.24.

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