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PPG Industries Sees Q1 Earnings Above Street, To Layoff 2,000 Jobs

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4/5/2012 1:25 PM ET

Paint maker PPG Industries (PPG: Quote), Thursday issued its earnings guidance for the first-quarter that is expected to come in ahead of current Wall Street estimates. The company also detailed a restructuring plan to reduce costs, which would layoff of 2,000 jobs, mostly in Europe.

The Pittsburgh-based company now expects first-quarter 2012 earnings in a range of $0.02 to $0.07 per share.

PPG anticipates adjusted earnings, which excludes non-recurring charges, between $1.75 and $1.80 per share.

Analysts polled by Thomson Reuters currently estimate earnings of $1.44 per share for the quarter. Analysts' estimates typically exclude one-time items. The company reported adjusted earnings of $1.40 per share for the first quarter last year.

Chief Executive Charles Bunch said, "During the quarter, we saw the overall pace of business activity improve compared with the fourth quarter 2011. This trend was aided by modest customer restocking and normal seasonal factors, and lower natural gas costs in the United States are also contributing to our results."

PPG expects to record non-recurring charges in the first-quarter related to business restructuring, environmental remediation and acquisition-related expenses.

PPG said it will restructure its global architectural coatings businesses in Europe in order to reduce its expenses. The restructuring actions will lead to an after-tax charge of about $1.06 per share and impact about 2,000 employees, the company said in a statement.

"These cost-reduction actions, while always difficult decisions, are needed to ensure that our cost structure is appropriate for business conditions and that all of our operations remain competitive globally," said, Chief Executive Charles Bunch.

Bunch said the restructuring, when completed, would result in annualized savings of about $140 million, with 2012 partial-year savings of between $40 million and $50 million.

PPG will also record an after-tax charge of $0.64 per share related primarily to continued environmental remediation activities at the company's New Jersey manufacturing plant and associated sites.

PPG is currently trading on the NYSE at $96.08, up 2.31%, on a volume of 3.3 million shares, above the three-month average volume of about one million.

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