PPG Industries (PPG) posted stronger-than-expected fourth quarter earnings Thursday but guided for slower growth in 2019 citing a stronger U.S. dollar and increased economic uncertainty.
PPG said adjusted earnings for the three months ending in December came in at $1.15 per share, down 3.4% from the same period last year but 5 cents ahead of the consensus forecast. Group sales, PPG said, fell 1% to $3.6 billion, narrowly missing the Street estimate of $3.65 billion. However, PPG said current quarter earnings in the region of $1.18 to $1.23 per share, firmly short of the Refinitive I/E/B/S estimate of $1.42.
"As we look ahead, while we remain confident we are well-positioned strategically and financially, we enter 2019 with more global economic uncertainty," said CEO Michael McGarry. "The carryover impact from the first-half 2018 cost inflation, significantly unfavorable year-over-year foreign currency translation and modestly lower sales volumes will impact our performance in the first half of 2019."
"We are focused on delivering increased financial results and will be providing certain detailed information regarding our full year 2019 forecast and financial targets in a separate communication," he added.
The full year forecasts, which included sales growth of between 3% and 5% on a constant currency basis, as well as adjusted earnings growth of between 7% and 10%, somewhat offset the weaker first quarter guidance, as did the reference to a strategic review of its business units.
PPG shares were marked 4% higher at the start of trading Thursday and changing hands at $106.77 each, a move that would extend the stock's three-month gain to around 5% and value the Pittsburgh, Pa.-based industrial group at around $28 billion.