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Higher materials prices lower PPG forecasts

Thursday, September 14, 2000

By Stephanie Franken, Post-Gazette Staff Writer

PPG Industries Inc., the Pittsburgh glass, coatings and specialty chemicals company, yesterday said third-quarter earnings would fall below analysts' expectations.

The company forecast per-share earnings of 85 to 90 cents, compared with analysts' expectations of 89 cents to $1.02, as reported by First Call.

The estimates exclude a one-time charge of 2 to 3 cents per share for PPG Auto Glass, the company's joint venture with Apogee Enterprises Inc.

PPG said slowdowns in automotive, construction and some industrial markets cut into demand for some of its products, while rising energy and raw material prices undermined profits.

On the plus side, quarterly sales and earnings "continue to benefit from recent acquisitions," Chairman and Chief Executive Officer Raymond LeBoeuf said. He also said PPG will continue to raise prices to offset rising production costs.

"While we expect to improve our earnings substantially from last year, if current trends continue we are unlikely to exceed our record earnings per share from operations of $4.13," LeBoeuf said, referring to 1998. Last year, earnings per share totaled $3.68.

Saul Ludwig, an analyst with McDonald Investments Inc., said PPG's projected third-quarter earnings met his expectations of 90 cents per share. He said he had been conservative in his forecast, taking into account a lower rate of volume growth in some of PPG's markets as well as rising energy and materials costs.

Ludwig expects full-year per-share earnings of $4.05, which he noted would still represent a 10 percent increase over 1999's results. "This is not a performance one has to be ashamed of," he said.

PPG closed yesterday at $39.75, down 25 cents.

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