PPG (NYSE:PPG) has announced that the third quarter 2016 reported loss per share from continuing operations is expected to be in the range of 74 cents to 77 cents compared to reported earnings per share from continuing operations of $1.52 in the third quarter 2015.
Reported earnings include previously disclosed pension settlement charges that totaled $2.31 per share in third quarter 2016 and 2 cents per diluted share in the previous year. Adjusted earnings from continuing operations for the third quarter 2016 are expected to be in the range of $1.54 to $1.57 per share, compared to $1.54 per diluted share in the prior year’s quarter. Net sales for the third quarter 2016 are expected to be approximately $3.8 billion. Figures for both periods exclude results for the recently divested flat glass business, which are now reported as discontinued operations.
“Our third quarter adjusted earnings per share includes benefits from an improvement in our global volume growth rate, supported by increased spending on growth-related initiatives. Year-over-year, our volumes grew more than 1.5 percent, despite slower-than-expected growth in Europe,” said Michael H. McGarry, PPG chairman and chief executive officer. “However, we are disappointed with this quarter’s EPS growth rate as we continue to operate in a sluggish economic environment with no clear near-term catalyst for improving global GDP growth,” McGarry said.
“As a result, we are reviewing potential actions to reduce our overall cost structure, both through broad global operating-cost improvements and targeted regional actions where economic conditions are weakest. These cost actions would be in addition to the restructuring program announced in 2015. We will maintain appropriate spending on initiatives focused on accelerating our organic growth rate,” McGarry said.
“We also remain committed to continuing earnings-accretive cash deployment. We expect spending on acquisitions and share repurchases for the combined years 2015 and 2016 to be at the top end of the previously communicated $2.0 billion to $2.5 billion range,” McGarry concluded.
The company also announced today that its board of directors has authorized a $2 billion share repurchase program. This program is in addition to the company’s existing share repurchase authorization which was approved in 2014 and had approximately $520 million remaining as of September 30, 2016. The company has deployed approximately $1.85 billion of cash on acquisitions and share repurchases, including about $250 million of share repurchases completed during the third quarter 2016, against its previously stated target of $2.0 billion to $2.5 billion for 2015 and 2016 combined.
The company stated that the new share repurchase authorization is effective immediately, does not expire and gives management discretion in determining the conditions under which shares may be purchased. It added that all repurchases will be made in accordance with applicable securities laws in the open market or in privately negotiated transactions, and that repurchases may commence or cease without prior notice depending on economic and equity market conditions, magnitude of other cash uses, including pace and timing of acquisitions, and other factors.
PPG will conduct a teleconference to discuss third quarter 2016 financial results in detail Thursday, Oct. 20, at 2 p.m. Eastern Time. Earnings release and teleconference information is available on the Investor Center at www.ppg.com.