PPG Industries Inc.'s (PPG) third-quarter profit rose 36% on
prior-year restructuring charges, but the paint, glass and chemical
maker continued to report weak demand. Results, however, topped
analysts' expectations on cost cuts and higher margins.
Still, shares fell 2.2% premarket to $60.15. That comes after
the stock has climbed nearly 50% the past three months.
The company has closed plants and cut jobs in two major
restructurings in the past year as its industrial and automotive
customers cut output. Chairman and Chief Executive Charles E. Bunch
said in July that he expected market demand to improve in the third
quarter, "but only mildly." He noted Thursday that things did
improve modestly in the period from the first half of 2009.
He expects more "modest" gains this quarter.
PPG reported a third-quarter profit of $157 million, or 96 cents
a share, up from $117 million, or 70 cents a share, a year earlier.
Excluding restructuring and other impacts, earnings fell to 97
cents a share from $1.37 a share.
Revenue slid 24% to $3.23 billion, including a
five-percentage-point impact from a divestiture.
Analysts surveyed by Thomson Reuters were looking for earnings,
excluding items, of 89 cents a share on revenue of $3.13
billion.
Gross margin rose to 38.3% from 36.1%.
Earnings at PPG's performance-coatings segment, the company's
biggest by sales, rose 5% on the cost cuts while revenue dropped
13%.
Industrial-coatings earnings climbed 21%, also on the
belt-tightening, while sales dropped 19% as the business was again
hurt by lower auto production. But demand was higher than earlier
this year.
-By Mike Barris and Kevin Kingsbury, Dow Jones Newswires;
212-416-2330; mike.barris@dowjones.com