PPG Industries cuts annual profit forecast after missing quarterly sales estimates
July 18 (Reuters) - PPG Industries PPG.N cut its annual adjusted profit forecast on Thursday after reporting lower-than-expected second-quarter revenue due to weakness in its industrial coatings unit.
Shares of the paint and industrial coatings maker fell 3.4% in trading after the bell.
The company's sales growth were unfavorably impacted due to "global automotive builds that weakened as the quarter progressed and global industrial production which remained soft," CEO Tim Knavish said in a statement.
U.S. new vehicles sales slowed in the crucial selling period of late June after a cyber-attack at software systems provider CDK impacted dealers across the country, leaving them unable to meet demand.
At PPG's automotive OEM coatings unit, which sells paints, coatings and adhesives to the auto industry, organic sales decreased by a "high single-digit percentage due to lower selling prices" during the quarter, the company said.
Lower selling prices in PPG's industrial coatings segment took a hit on the unit's net sales that declined 4.6% to $1.75 billion in the quarter ended June 30, compared to $1.83 billion last year.
PPG forecast an adjusted per-share profit of $2.10 to $2.20 for the third quarterand cutits annual EPS forecast to $8.15 to $8.30from $8.34 to $8.59 per share previously.
Despite the weak forecast, PPG expects to see an overall improvement in the second half of the year, driven by strong momentum in Mexico and modest demand growth in China, Europe and the United States.
Earlier this year, PPG said it would review strategic alternatives for its architectural coatings business in the United States and Canada.
The company is also reviewing alternatives for its silica products business.
The Pittsburgh, Pennsylvania-based firm's net sales fell to $4.79 billion in the April-June quarter, compared with analysts' estimate of $4.92 billion,according to LSEG data.
Reporting by Vallari Srivastava in Bengaluru; Editing by Mohammed Safi Shamsi
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