PPG’s Q3 earnings will be up to 7% lower than previously expected due to the economic slowdown in Europe and pandemic-related lockdowns in China, said the company.
The producer said “soft demand conditions” in the third quarter were expected to continue into Q4.
PPG had expected adjusted earnings per share in Q3 to stand at $1.75-2.00, but it now expects that to be between 5% and 7% lower.
“In comparison to its forecast at the beginning of the third quarter, company sales were impacted by further softening demand in Europe. In addition, sequential quarterly demand recovery was lower than expected in China due to a resumption of certain pandemic-related restrictions,” said PPG.
“The sales volume declines were most pronounced in September and resulted in a reduction in the earnings benefit from higher selling prices and reduced manufacturing efficiencies versus the prior forecast.”
PPG had issued an upbeat Q3 outlook in July; at the time, the company said it expected a "choppy" recovery in Europe.
We remind, PPG will invest USD11 million to double the production capacity of its powder coatings plant in San Juan del Rio, Mexico. The expansion project is expected to be completed by mid-2023 and will allow the plant to meet the expected future demand for powder coatings in Mexico.
PPG is a leading supplier of powder coatings to the automotive, transportation, appliance, furniture and other markets. The company expanded the business with its 2020 acquisition of Alpha Coating Technologies, which manufactures powder coatings for light industrial applications and heat-sensitive substrates, and its 2021 acquisition of Worwag, which makes liquid, powder and film coatings for industrial and automotive applications. PPG recently agreed to acquire the powder coatings business of Arsonsisi, including a manufacturing plant in Verbania, Italy.
mrchub.com