PPG Shares Dive On Profit Warnings, Restructuring Plans

Shares of paint-maker PPG Industries Inc. tumbled 5% in premarket trade, after the company said it's disappointed with its third-quarter per-share earnings growth rate and unveiled restructuring plans. PPG said it expects a net loss per share of 74 cents to 77 cents, after EPS of $1.52 a year ago. Excluding pension settlement charges, it expects EPS of $1.54 to $1.57, well below the current FactSet of $1.71. Sales are expected to come to about $3.8 billion, in line with the current consensus. "We are disappointed with this quarter's EPS growth rate as we continue to operate in a sluggish economic environment with no clear near-term catalyst for improving global GDP growth," Chief Executive Michael McGarry said in a statement. PPG is planning to reduce costs, focusing on areas where economic conditions are weakest. At the same time, it is planning to continue with cash deployment aimed at boosting earnings. "We expect spending on acquisitions and share repurchases for the combined years 2015 and 2016 to be at the top end of the previously communicated $2.0 billion to $2.5 billion range," McGarry said. The company's board has approved a $2 billion share buyback, that will add to an existing authorization that has $520 million remaining. Shares have gained 3.4% in the year so far, while the S&P 500 is up about 6%.