PPG Shares Pop as Earnings Surprise

PPG Industries (PPG), a maker of industrial paints, beat profit expectations for its second quarter on "aggressive" cost cuts, news that appeared to buoy the company's stock Thursday morning.

But business remains difficult for Pittsburgh-based PPG. Profit tumbled 42% from a year ago and sales fell 30% to $3.1 billion -- the second straight period of 30% year-over-year top-line declines. One of the company's main businesses, after all, is the manufacture of coatings for the auto industry.

While PPG sounded notes of optimism in its quarterly report, released before the opening bell Thursday, it punctuated those notes with qualification.

"Looking ahead to the third quarter, we expect overall market demand to improve, but only mildly," said the company's boss, Charles Bunch, in a prepared statement.

And: "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."

Investors bought into PPG shares early in Thursday's session. The stock was trading recently at $48.57, up $2.47, or 5.4%.

PPG posted net income of $146 million, or 89 cents a share, ahead of the 75 cents analysts had forecast, but well below last year's corresponding figures: $250 million, or $1.51 a share.

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