Paint Maker PPG Sets Dim Outlook for 2020 -- Update
January 16 2020 - 9:57AM
Dow Jones News
By Austen Hufford and Micah Maidenberg
Paint maker PPG Industries Inc. said its sales this year would
be hurt by weak industrial demand in the U.S. and Europe, as
manufacturers confront global trade tensions and a production drop
at Boeing Co.
PPG supplies Boeing as well as car makers and many other U.S.
manufacturers, a sector that has contracted for five straight
months through December according to the Institute for Supply Chain
Management. The Pittsburgh-based company also makes products for
Airbus SE and other manufacturers globally.
PPG said Wednesday that it generated sales of $3.67 billion in
the fourth quarter, in line with expectations, but said that sales
this year would be affected by new challenges including "lower
production rates by an aerospace customer."
Boeing suspended production of its best-selling 737 MAX this
month as the best-selling jet remains grounded globally following
two fatal crashes. Hundreds of suppliers make parts for the
plane.
"We delivered this strong performance in spite of weakening
global manufacturing activity that impacted many of our industrial
end-use markets," PPG Chief Executive Michael McGarry said in a
statement.
The company also said industrial demand in China stabilized in
the fourth quarter. Chinese officials have implemented policies to
bolster the economy in recent months.
PPG reported a profit of $292 million, or $1.22 a share, for the
fourth quarter, compared with $258 million, or $1.08 a share, a
year earlier. Its adjusted profit of $1.31 a share was 3 cents
lower than forecasts from analysts polled by FactSet.
PPG said it expected sales to rise 1% to 3% this year after
adjusting for currency fluctuations. The company forecasted
per-share adjusted profit growth of 4% to 9%.
In September, PPG reached a settlement with the Securities and
Exchange Commission to close an investigation into accounting
irregularities without paying a fine. In 2018, the company fired
its controller after it uncovered multiple instances of improperly
adjusted financial metrics.
Write to Austen Hufford at austen.hufford@wsj.com and Micah
Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
January 16, 2020 09:42 ET (14:42 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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