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PPG Shares Down 10% On Weak Outlook Hurt By Rising Costs, Soft Demand

PPG (PPG) Monday issued a weak outlook for the third quarter, with both earnings and revenues expected to miss current Street estimates. Shares of the paint and coatings maker fell more than 10 percent in the extended trading session.

PPG expects third-quarter earnings from continuing operations to be $1.47 to $1.51 per share and adjusted earnings from continuing operations of $1.41 to $1.45 per share. On average, 20 analysts polled by Thomson Reuters currently estimate earnings of $1.59 per share. Analysts' estimates typically exclude one-time items.

Net sales for the third quarter are expected to be about $3.8 billion. Analysts currently estimate revenues of $3.88 billion for the quarter.

Last year, the company reported third-quarter sales of $3.8 billion and earnings of $1.52 per share.

CEO Michael McGarry said the company was negatively impacted by "significant raw material and elevating logistics cost inflation."

"Also, during the quarter, we saw overall demand in China soften, and we experienced weaker automotive refinish sales as several of our U.S. and European customers are carrying high inventory levels due to lower end-use market demand," McGarry added.

The company currently expect fourth quarter earnings to be in the range of $1.03 to $1.13 per share, McGarry said. Analysts currently estimate earnings of $1.35 per share for the quarter.

PPG closed Monday's trading at $109.58, up $1.56 or 1.44%, on the NYSE. The stock, however, dropped $11.03 or 10.07% in the after-hours trade.

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