Both the joint venture agreement and the cabin assembly contract stem from a MOU signed in Feb 2007 by the companies to explore the creation of aerospace operations in India. The cabin assembly contract signed in June 2009 has led to ongoing construction in Hyderabad, in the state of Andhra Pradesh, where TASL will assemble S-92 helicopter cabins starting in 2010. 

The new joint venture will be positioned to manufacture components for other aerospace Original Equipment Manufacturers (OEMs) as well as detailed parts for the Sikorsky S-92® helicopter cabin. It is expected that the joint venture operations will be housed in a second greenfield facility that will be constructed in Hyderabad, next to the cabin assembly building. Construction for the joint venture company's facility is targeted for completion by 2011, with production beginning in late 2012.

Tata companies operate in seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. They are, by and large, based in India and have significant international operations. The total revenue of Tata companies, taken together, was $70.8 billion in 2008-09, with 64.7% of this coming from business outside India, and they employ around 357,000 people worldwide.
 
United Technologies provides high technology products and services to the building systems and aerospace industries worldwide. Operating units include businesses with operations throughout the world. Otis, Carrier and UTC Fire & Security (collectively referred to as the commercial businesses) serve customers in the commercial and residential property industries worldwide; Carrier also serves commercial, industrial, transport refrigeration and food service equipment customers.

Pratt & Whitney, Hamilton Sundstrand and Sikorsky (collectively referred to as the aerospace businesses) primarily serve commercial and government customers in both the original equipment and aftermarket parts and services markets of the aerospace industry; Hamilton Sundstrand and Pratt & Whitney also serve customers in certain industrial markets. Major competitor is Boeing Co. (BA).
 
We currently have a Neutral recommendation on UTX.

Company Description

RPM International is a holding company for subsidiaries that manufacture specialty coatings and sealants for industrial and consumer customers. Its industrial segment produces roofing systems, sealants, corrosion control coatings and specialty chemicals under the brands Tremco, Day-Glo, Euco and Dryvit, among others.

On the consumer side, its products are used for home maintenance, boat repair and by hobbyists. Those brands include Zinsser, Rust-Oleum, DAP, Varathane and Testors.

RPM Raised Dividend by 2.5%

When everyone else is cutting dividends, RPM continues to not only reward its shareholders but also increased its dividend for the 36th consecutive year.

On Oct 8, the company increased its dividend by 2.5% to 20.5 cents from 20 cents paid last year. It's current dividend yield is a hefty 4.50%.

Record Earnings in the Fiscal First Quarter 2010

On Oct 5, RPM reported fiscal first quarter 2010 earnings that surprised on the Zacks Consensus Estimate by 29.55%. Earnings per share were a record 57 cents, or 7.3% higher than the 53 cents reported a year ago. The Zacks Consensus called for just 44 cents. Cost cutting allowed for the EPS growth.

Sales, however, fell 7.1% to $916 million from $985.5 million in fiscal first quarter 2009. Gains in the consumer end of the market offset weakness in the industrial segment. Consumer sales, which were 34.5% of the quarter's sales, grew 12.5%.

Sales in the larger industrial segment fell 14%. The industrial market continues to endure a struggling commercial construction environment and reduced spending.

Fiscal 2010 Outlook

The company is cautiously optimistic given the better than expected first quarter results.

"The sequential increase in sales from the fiscal 2009 fourth quarter of 6.8% is a marked change from previous years where the first quarter is typically lower than the fourth quarter. We see this as a bullish sign of a slowly improving economy," said Frank C. Sullivan, chairman and CEO.

RPM forecasts that it will be at higher end of its prior EPS guidance of 5% to 25% over the $1.05 earned in fiscal 2009.

Zacks Consensus Estimates Rise

Analysts have moved in-line with the company's full year projections. Second quarter Zacks Consensus Estimates are up 2 cents to 33 cents in the last 60 days.

The full year consensus estimate has also jumped to $1.26 from $1.21 in the last 2 months.

Value Fundamentals

RPM International is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 14.53 and a price-to-book ratio of 1.93. The company also has an outstanding 5-year average return on equity (ROE) of 16.44%.

Zacks Investment Research

As per the indenture/agreement, these debentures have now become convertible as Thermo Fisher’s stock traded above the minimum specified price over the applicable measurement period. The debentures can be converted by the end of this year. Thermo Fisher will use its cash or a combination of cash and its common stock to settle the conversion. 

Thermo Fisher is a scientific instrument maker and a world leader in serving science. The company was formed through the merger of Thermo Electron Corporation with Fisher Scientific International Inc. in November, 2006. Thermo Fisher Scientific serves its customers through two principal brands: Thermo Scientific and Fisher Scientific.

Thermo Scientific is the company’s technology brand that offers a complete range of high-end analytical, laboratory instruments, software, services, consumables and reagents to enable integrated laboratory workflow solutions. The Fisher Scientific brand offers a complete portfolio of laboratory equipment, chemicals, supplies and services used in healthcare, scientific research, safety and education markets.

Thermo Fisher Scientific operates through two business segments - Analytical Technologies and Laboratory Products and Services. The company generated revenues of $10,498 million in fiscal 2008, an increase of approximately 8% year over year. Thermo Fisher’s main competitors are Agilent Technologies Inc. (A), Beckman Coulter Inc. (BEC) and Danaher Corp. (DHR).

Company Description

The Dow Chemical Company manufactures and sells chemicals, plastic materials, agriculture and other specialized products and services worldwide. The company was founded in 1897 and has a market cap of $29 billion.

Shares of DOW have rallied big over the last few months as the company recovers from the global economic crisis and focuses on repaying debt related to its acquaition of fellow chemical maker Rohm and Haas. The company's 2nd quarter results, reported in late July, showed revenue was down from last year, but earnings came in ahead better than expected.

Second-Quarter Results

Sales for the quarter were down 31% from last year to $11.32 billion. But earnings came in at 5 cents per share, 10 cents ahead of the Zacks Consensus Estimate.

More recently, Dow has made it very clear that it is intent on paying down its bloated debt situation due to its Rohm and Haas acquisition, which pushed its total debt load to $22 billion from $8 billion. The company used a large portion of its $1.65 billion in proceeds from the recent sale of Mortan Salt to pay off a $1 billion bridge loan. For full coverage on the debt story from the Zacks analyst department click the link below.

Dow Sells Morton, Pays Down Debt

Bullish Next-Year Estimate

The current-year estimate is a slightly anemic 27 cents, but with optimism abound, the next-year estimate is very bullish, pegged at $1.14, a 317% growth projection.

Valuation

Based on the more bullish next-year estimate, this stocks has a P/E multiple of 21X, a premium to the overall market.

The Chart

Shares of DOW are up more than 300% since bottoming out just above $5 in early March, recently topping off above $25. Take a look at the big run below.

Zacks Investment Research

Company Description

Lubrizol Corp. produces specialty chemicals and additives to various industries and consumers worldwide. The company was founded in 1928 and has a market cap of $4.84.

Shares of LZ have been on fire since bottoming out just above $23 in early march. Since then, this stock has consistently set new 52-week highs, recently topping off above $71. The big move has been accompanied by rising estimates.

Estimates Rising

The current-year estimate is up 24 cents in just the last 7 days and a whopping $1.97 in the last 3 months, currently standing at $6.20 per share.

Second-Quarter Results

Looking back a bit further, the company's solid second-quarter results, reported in late July, gave shares an extra boost. Revenue was down from last year to $1.11 billion, but earnings were on target at $2.02 per share, in line with the Zacks Consensus Estimate.

Valuation

In spite of the massive run up in shares, this stock still has value, trading at 11.5X projected current-year earnings, a sharp discount to the overall market.

And The Dividend?

Not only are shares trending higher, but this stock also pays a respectable dividend of 1.90%, adding a nice source of income to compliment capital gains. Zacks Investment Research

The specialty chemicals company had earlier projected earnings of $5.47 to $5.77 per share. Excluding charges, its new adjusted earnings per share will be between $6.10 and $6.40, up from its prior view of $5.70 to $6.00 per share. The Zacks Consensus Estimate is pegged at $5.96.

Ratings Affirmed

Recently, Fitch Ratings affirmed its BBB rating on Lubrizol, reflecting a low to moderate credit risk. The rating outlook remains Stable driven by the company’s strong position in the additives market, steady free cash flow generation, reasonable credit metrics and cumulative debt reduction since its acquisition of Noveon International in June 2004.

The company's additives business continues to dominate its overall results. Lubrizol remains the largest single seller of lubricant additives in a market that has few other big players, which results in substantial pricing power and has translated into an ability to pass on costs to downstream customers.

Despite weak volumes, Lubrizol generated healthy operating cash flows in the second half of 2009. This was due to margin expansion, inventory reductions and other favorable working capital changes in the additives business brought about by the sharp drop in energy feedstock costs. Fitch expects Lubrizol to generate strong cash flow in 2009. With a cash balance of $860.8 million at the end of the second quarter of 2009, the company's liquidity is also strong.

About $1.7 billion in debt is affected by this rating action. Fitch anticipates Lubrizol's total debt to drop to around $1.5 billion after it repays the remaining 2009 notes, or even lower if it prepays some or its entire $150 million term loan. However, Fitch remains concerned about the company’s volume and margin weakness in the chemicals business. Subdued performance in the advanced materials segment that continues to pressure working capital is also a cause for unease.

Volatile crude oil prices have significantly affected the basic chemicals market, forcing the second-largest chemical manufacturer in the world to divest its styrene monomer and ethylbenzene production at Freeport, Texas. This sale will reduce Dow’s exposure to a capital-intensive Basic portfolio. About 60 employees will be affected.

Midland, Michigan-based Dow Chemical aims to shift focus to specialty chemicals that are used in cosmetics and food additives, and work with partners to meet basic chemical needs. After the Rohm & Haas acquisition in the second quarter, Dow announced a restructuring plan, including complete integration of ethylene production with internal demand, reducing its ethylene requirement from the US Gulf Coast by about 30%.

Dow expects to improve its cost position by eliminating ethylene purchases from the merchant market. The company purchases about three billion pounds of ethylene from external sources annually.

Separately, Dow partnered with Alstom Power to develop a pilot plant to tap about 1,800 metric tons of carbon dioxide (CO2) annually from flue gas of a coal-fired boiler at its South Charleston, West Virginia facility. Alstom is a global leader in power generation and rail infrastructure. The pilot plant is expected to be operational by the third quarter.

In 2008, Dow and Alstom had agreed to develop an advanced amine technology for CO2 capture. Currently, they are focusing on building an advanced amine-based scrubbing technology for industries that produce exhaust or flue gases containing CO2 and high levels of oxygen.

The new process will significantly reduce the amount of energy required for CO2 separation and capture. The West Virginia pilot plant will validate this new technology. Dow aims to reduce greenhouse gas emissions that are responsible for global warming by exporting the technology to its power plants, where CO2 will be stored. We maintain our Neutral recommendation on Dow Chemical.

Foster Wheeler has received a notice to begin work on this contract. The terms of the agreement were not disclosed and the contract value will be included in the company’s orders for the third quarter of 2009. Commercial operation of the new steam generator is scheduled for the first quarter of 2012.

Foster Wheeler will design and supply the steam generator and auxiliary equipment. It will carry out the erection and commissioning of the boiler island. The steam generator will be equipped adequately to burn wood biomass and up to 20% agro biomass. When combined with the CFB’s demonstrated ability to reduce emissions, the fuel flexibility enables the unit to operate with minimal environmental impact compared with conventional boilers.

Foster Wheeler is a global engineering and construction contractor and power equipment supplier, with a reputation for delivering high quality, technically advanced, reliable facilities and equipment on time, on budget and with a world-class safety record. Its Global Power Group offers advanced, cost-effective and environment-friendly energy solutions to customers around the world.

As one of the world's most prestigious engineering and construction companies, Foster Wheeler has over 100 years of experience and dedicated highly skilled personnel providing services worldwide. It designs, engineers and constructs leading-edge processing facilities and related infrastructure for the upstream oil & gas, LNG and gas-to-liquids, refining, chemicals & petrochemicals, pharmaceuticals, biotechnology & healthcare, environmental and power industries. The company's major competitors include Fluor Corp. (FLR) and Jacob’s Engineering Group Inc. (JEC). We currently have a Neutral recommendation on Foster Wheeler.

The Midlands, Michigan-based chemical company stated that the divestiture will increase its financial flexibility, improve cash flow and will help pay down debt. The company plans to use the proceeds from the deal to pay down debt, which was raised for the Rohm and Haas acquisition.

The Rohm and Haas acquisition increased Dow’s net debt from $8 billion to $22 billion in the first half of 2009. This resulted in a significant net cash deficit of $19 billion during the period. However, Dow Chemical has become the world’s leading specialty chemicals and advanced materials company after acquiring Rohm and Haas for a total investment of $16.3 billion.
 
Dow Chemical also noted that it expects to close its sale of the salt producing company, Morton Salt under Rohm and Haas to the Germany-based K+S AG for $1.68 billion in second half of 2009. K+G AG is an agricultural chemical and salt company and the largest supplier of Potash in Europe. The company is also divesting its stake in Optimal Group of Companies to Malaysia's state-controlled oil company for $660 million by the end of the year.

This apart, media reported that Dow Chemical and Saudi Aramco are expecting cost synergies of about $4 billion on their joint petrochemical complex as the slowing economy reduces project cost. The estimated cost of the plant was at least $20 billion before reduction. Saudi Aramco is the state-owned national oil company and the biggest oil corporation in the world with the largest proven crude oil reserves and production.

We maintain our Neutral recommendation on the stock.

The Vancouver-based company had $278 million of cash in hand at the end of the second quarter. With the new credit agreement and no near-term refinancing requirements, Methanex has positioned itself well to meet its financial commitments and continue investing in projects that stimulate growth.

Methanex is the world's largest supplier of methanol to major international markets in North America, Asia-Pacific, Europe and Latin America, with about a 15% market share.

The chemical Methanol is a blend of 68% natural gas and 32% coal. Natural gas costs have been rising resulting in higher cost of producing methanol. In 2008, the company’s cash costs of producing methanol increased by $73 million due to higher natural gas costs.

Approximately 80% of all methanol output is used for production of formaldehyde, acetic acid and a variety of other chemicals, demand for which is influenced by the levels of global economic activity. These chemical derivatives are used in the manufacture of a wide range of products including plywood, particleboard, foams, resins and plastics.

The remainder of methanol demand largely stems from the energy sector for the production of methyl tertiary-butyl ether (MTBE) – a gasoline component – and as a direct fuel for motor vehicles. Use of methanol in manufacturing bio-diesel and dimethyl ether (DME) in power generation and other applications is also on the rise.

Methanex has embarked on a number of growth projects including the one on alternative natural gas sources in Chile. However, lower demand and pricing, as well as an increase in worldwide inventories of methanol due to the global economic crisis are negatively affecting the company. We maintain our neutral recommendation on the stock.

Chevron holds a 50% operated interest in the $42 billion project, with the other partners being ExxonMobil Corp. (XOM) and Royal Dutch Shell PLC (RDS.A). The government approval to Australia's single largest natural resources project paves the way for a final investment decision by the Gorgon joint venture participants, once they get the nod for production licenses and construction plans.

The Gorgon gas fields, off the coast of Western Australia, are estimated to contain 40 trillion cubic feet of gas deposits and have an expected economic life of at least 40 years from the time of start-up. Chevron said that the venture will have an annual capacity to produce 15 million tons of LNG, with the first shipment expected in 2014.

The Gorgon development is expected to provide huge quantities of liquefied gas for export to China and other Asian nations. ExxonMobil and Royal Dutch Shell have already signed deals to sell much of their share of Gorgon production to Asian importers, including PetroChina Co. Ltd. (PTR).

We believe that the Gorgon approval will significantly boost Chevron's long-term growth prospects in the fast-growing LNG market. Also, the business environment for LNG continues to remain robust, with demand likely to grow at around 8-10% annually over the next few years in all major markets.

San Ramon, California-based Chevron is the fourth-largest publicly traded oil and gas company in the world, based on proved reserves. It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals and other energy-related businesses.