MW: PPG income falls 42% as revenue drops by $1.4 billion
By Steve Gelsi, MarketWatch
NEW YORK (MarketWatch) -- PPG Industries said Thursday second-quarter net income fell 42% as the maker of coatings and paints suffered through a downturn in its automotive business and less favorable currency conversion.
PPG (PPG 47.10, +1.00, +2.17%) earnings for the three months ended June 30 dropped to $146 million, or 89 cents a share, from $250 million, or $1.52 a share in the year-ago period.
Adjusted net income at the Pittsburgh-based maker of paints, optical products and coatings said adjusted net income for the quarter totaled 91 cents a share. Sales dropped 30% to $3.1 billion.
Currency conversion accounted for more than 40% of the sales decline as the dollar strengthened over the year-ago period.
PPG also cited lower volumes in the automotive refinish business.
Analysts expected earnings of 74 cents a share on revenue of $3.28 billion, according to a survey by FactSet Research.
"Looking ahead to the third quarter, we expect overall market demand to improve, but only mildly," the company said. "We expect sequential improvement in the U.S. automotive original equipment manufacturing market, but we expect the opposite for commodity chemicals."
Shares of PPG Industries rose 2% to $47.10 on Wednesday.
"Clearly, we are continuing to experience very challenging conditions in many of our end-use markets," PPG said. "However, we are encouraged as our total sales during the quarter remained fairly consistent month to month, and were also steady within each major region. This gives us a degree of confidence that most markets have stabilized, albeit at considerably lower levels than prior years."
