Charges, Sales Drop Drag PPG To Loss

By William Spain

PPG Industries Inc. said Thursday it tumbled to a loss in the first quarter, hurt by restructuring charges and sales declines.

Before the start of trading, PPG (PPG) said it lost $111 million, or 68 cents a share, on the period compared with a profit of $100 million, or 61 cents a share, in the same quarter a year ago. On an adjusted basis, the company said it would have earned 19 cents a share.

Sales came in at $2.8 billion, down 30%, on weak demand and divestitures.

The average estimate of analysts polled by FactSet Research had been for the company to earn 14 cents a share on sales of $3.13 billion.

"Our first quarter results reflect continued deterioration in the global economy, resulting in lower demand in many of the end-use markets we serve," said Charles Bunch, chief executive, in the earnings report. "The most significant drop-offs occurred in global automotive ... and in many industrial markets."

Shares of PPG rose 2% to $45.37.

Last month, the stock was downgraded to neutral from buy at Merrill Lynch, with the broker citing incremental weakness in caustic soda, ongoing deterioration in architecture, aerospace, protective and marine coatings, expected pressure in glass, given weaker nonresidential construction and continued broad-based industrial demand weakness.

The company also announced in March that it would eliminate about 2,500 jobs, or about 6% of its global workforce, and halt contributions to its employee retirement plans in an effort to reach $140 million in annual savings next year.

-By William Spain, 415-439-6400; [e-mail]