PPG Industries, Inc. (NYSE: PPG)
PPG Industries expects to report downbeat earnings and revenue for its third and fourth fiscal quarters after experiencing elevating logistics and raw material costs, according to a statement released on Monday.
The Pennsylvania-based company added that demand for its products in China has gone down in recent months. Weaker automotive refinish sales are also expected to affect its quarterly results as several of its customers in the US and Europe are carrying high inventory levels due to lower end-use market demand
PPG now expects to report third-quarter earnings of between $1.47 and $1.51 per share, or adjusted earnings of $1.41 to $1.45 per share on Thursday, October 18. The company sees revenue of about $3.8 billion, which is below analyst consensus of $3.9 billion.
For its fourth-quarter, the paint maker provided earnings guidance of between $1.03 and 1.13 per share. Thompson Reuters, based on analysts’ estimates, expects the company to report fourth-quarter earnings of $1.34 per share.
PPG shares closed Monday’s regular session at $109.58 but later dropped more than 8% in after-hours trading. The stock was down $11.52, or 10.51% to $98.06 in pre-market trading on Tuesday.
PPG Industries CEO Comments
“In the third quarter, we continued to experience significant raw material and elevating logistics cost inflation, including the effects from higher epoxy resin and increasing oil prices,” said Michael McGarry, PPG chairman and chief executive officer. “These inflationary impacts increased during the quarter and, as a result, we experienced the highest level of cost inflation since the cycle began two years ago.
“We are disappointed with the third quarter earnings results. We continue to work proactively with our customers on higher selling prices to reflect the value of the products we sell and recover margins which have been negatively impacted by the raw material inflationary environment in all of our businesses. We will continue to aggressively manage our costs including accelerating restructuring activities wherever possible,” McGarry concluded.
PPG Industries, Inc. Company Profile
PPG Industries, Inc. manufactures and distributes paints, coatings, and specialty materials in the United States and internationally. It operates through Performance Coatings and Industrial Coatings segments.
The Performance Coatings segment provides coatings products for automotive and commercial transport/fleet repair and refurbishing; light industrial and specialty coatings for signs; coatings, sealants, and transparencies for commercial, military, regional jet and general aviation aircraft, and transparent armor; protective and marine coatings and finishes; architectural coatings; and purchased sundries to painting contractors and consumers, as well as chemical management services.
The Industrial Coatings segment provides adhesives and sealants for the automotive industry; metal pretreatments and related chemicals for industrial and automotive applications; packaging coatings for the protection, performance, and decoration of metal cans, closures, plastic tubes, industrial packaging, and promotional and specialty packaging; precipitated silicas for tire, battery separator, and other markets.
It also offers substrates for use in radio frequency identification tags and labels, e-passports, drivers’ licenses, and identification cards; organic light emitting diode materials for use in displays and lighting; optical lens materials and photochromic dyes for optical lenses and color-change products. The company was founded in 1883 and is headquartered in Pittsburgh, Pennsylvania. – Yahoo Finance