PPG cuts earnings forecast

PPG Industries Inc. on 22 December 2008 cut its earnings forecast for the three months ending 31 December 2008 to a range of USD 0.35 to USD 0.45 a share because of the “accelerating rate of decline i…

PPG Industries Inc. on 22 December 2008 cut its earnings forecast for the three months ending 31 December 2008 to a range of USD 0.35 to USD 0.45 a share because of the “accelerating rate of decline in the global economy”. A consensus of analysts had projected that PPG earnings would be about USD 0.73 a share. Paint, coatings, chemical, optical products and glass supplier PPG said that its industrial coatings and glass segments are expected to report losses in the 4Q 2008. Those results, to be released on 16 January 2009, will reflect the benefit from falling raw material and energy costs, the company said. The market softness initially seen in US industrial markets is now prevalent on a global basis, said PPG chief financial officer William Hernandez. Businesses serving the industrial-end markets are experiencing significant loss of volume because customers are responding to lower consumer demand and tighter credit by decreasing production and reducing inventory, Mr. Hernandez said. The performance of PPG“s commodity chemicals, performance coatings and architectural coatings segments continue to be solid, and the company“s optical products business continues to grow volumes, Mr. Hernandez said. PPG has cut its operating costs in the past few months, selling its original equipment automotive glass and services business in September 2008 to a joint venture in which it maintains a 40% stake. In the 4Q 2008, PPG also reduced operations and worker numbers, some on a temporary basis, spokesman Jeremy Neuhart said. He did not have an estimate on the number of lay-offs.