PPG Sees 4Q Results Below Analysts' View, Plans Cost Cuts

PPG Industries Inc. (PPG) issued a fourth-quarter earnings view below analysts' expectations as its domestic industrial customers have been cutting production and taking longer to replenish inventories, reflecting weaker consumer demand and tight credit markets.

The maker of paints, glass and chemicals expects earnings of 35 cents to 45 cents per share for the quarter. Analysts polled by Thomson Reuters were looking for 67 cents.

Shares of PPG, which have dropped 44% over the past year, were down 5.2% to $ 39.32 in recent trading.

William H. Hernandez, the chief financial officer, said the company plans more cost cuts in the quarter, in addition to restructuring actions announced in September, and will "continue to monitor economic activity" in the first quarter.

Hernandez said volumes were weakest in the company's industrial coatings and glass segments and, as a result of the slump, the businesses are expected to report fourth-quarter losses.

However, PPG expects to benefit from falling raw materials and energy costs.

PPG said it has about $800 million of cash on hand, up about $300 million from Sept. 30, with commercial paper borrowings of slightly over $200 million.

In October, the company posted a 39% plunge in third-quarter net income, reflecting the impact of auto-industry productions cuts and hurricane-related costs.