DOW JONES NEWSWIRES
PPG Industries Inc.'s (PPG) second-quarter earnings fell 42% on
slumping sales as the paint, glass and chemical maker handily
topped analysts' profit expectations on a higher margin.
Chairman and Chief Executive Charles E. Bunch noted profit was
much higher than in recent quarters while sales were steady
month-to-month. "This gives us a degree of confidence that most
markets have stabilized," he said, "albeit at considerably lower
levels than prior years."
Bunch expects market demand to improve this quarter, "but only
mildly."
PPG has continued to struggle as industrial and automotive
customers cut output and hold off on restocking inventories,
hitting PPG's global automotive segment especially hard. In March,
the company announced a restructuring plan, closing plants and
cutting jobs, meant to eliminate $60 million in annual costs in
2009, in addition to a plan from September to save $100 million by
the end of this year.
PPG reported a profit of $146 million, or 89 cents a share, down
from $250 million, or $1.51 a share, a year earlier. Revenue slid
to $3.1 billion from $4.5 billion.
A survey of analysts by Thomson Reuters resulted in an average
per-share earnings estimate of 75 cents on $3.3 billion in
revenue.
Gross margin rose to 39.1% from 36.8%.
Earnings at PPG's performance-coatings segment, the company's
biggest by sales, fell 7.6% while revenue dropped 16%. Nearly all
of the profit drop and 40% of the sales decline was due to currency
impacts.
Industrial-coatings earnings slumped 74% while sales dropped 36%
as the business was hurt by tumbling auto production.
PPG's shares recently rose 0.9% to $46.50 premarket. The stock
has risen nearly two-thirds since a 14-year low in March.
-By Joan E. Solsman and Kevin Kingsbury, Dow Jones Newswires;
212-416-2291; joan.solsman@dowjones.com