PPG Industries (PPG) posted stronger-than-expected second quarter earnings Thursday but cautioned that near-term profits will be softer amid slowing sales and an ongoing negative impact from foreign exchange rates.
The Pittsburgh-based paint and coatings supplier said adjusted net income for the three month ending in June came in at $441 million, or $1.85 a share, vs. $468 million, or $1.90 a share, in the comparable year-earlier period. Analysts polled by FactSet had been expecting earnings of $1.83 a share. Sales rang in at approximately $4 billion, down roughly 3% versus the prior year and a shade below the $4.1 billion expected by analysts.
"We remain committed to recovering our operating margins and in the quarter delivered higher gross profit and segment operating margins compared to the prior year," said PPG CE Michael McGarry. "This is despite weak global industrial production which impacted all major regions and several of our end-use markets including our general industrial and automotive OEM coatings businesses"
"We continued to benefit from solid growth in several of our businesses, including aerospace and protective and marine coatings," he added.
PPG shares closed at $116.61 each in New York trading Wednesday, after falling 1.05% on the session, to trim its year-to-date advance to around 14%.
"Unfavorable foreign currency translation" impacted net sales by more than 3%, or about $130 million, the company said.
The company is currently expecting third-quarter per-share earnings in the range of $1.57 to $1.67 on full-year sales growth of "a low-single-digit percentage," McGarry added. Analysts polled by FactSet are currently expecting third-quarter per-share earnings of $1.67.
Shares of PPG opened down a little more than 1% at $115.43 on the New York Stock Exchange.