BA Boeing Co

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.