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PPG Industries to Invest $15M in Application Support Center

Zacks Equity Research

PPG Industries Inc. PPG recently announced an investment of $15 million in a new 3,600-square-meter application support center (ASC) at the Seletar Aerospace Park in Singapore. The ASC is slated for completion in first-quarter 2020.

The company stated that the ASC will accommodate higher demand for aerospace coatings and sealants, chemical management services and packaging of third-party products. The move is in response to the aerospace industry’s strong growth in Southeast Asia.

Moreover, the state-of-the-art facility will aid collaboration and enable the company in delivering efficient and value-added services to customers.

PPG Industries’ global aerospace business offerings include sealants, coatings, transparencies, application and packaging systems, and chemical management and other services.

PPG Industries, which is among the prominent players in the chemical space along with Eastman Chemical Company EMN, Air Products and Chemicals, Inc. APD and Celanese Corporation CE, logged net income from continuing operations of $270 million or $1.13 per share in second-quarter 2019, down around 27% year over year.

Adjusted earnings per share were $1.85, down from $1.90 a year ago. However, it beat the Zacks Consensus Estimate of $1.83.

PPG Industries expects industry demand for several of its businesses to remain sluggish in the third quarter. The company remains focused on recovering operating margins and expects the momentum to continue as it works with customers and suppliers to mitigate the impact of raw material cost inflation further.

The company expects third-quarter earnings in the range of $1.57-$1.67 per share. It also reaffirmed 2019 adjusted earnings per share growth of 7-10% and envisions sales growth of a low-single-digit percentage for the full year, both excluding currency translation impacts.

The company continues to aggressively manage costs amid a challenging business environment. It delivered roughly $20 million of cost savings in the second quarter. PPG Industries also remains committed in its cash deployment with a focus on shareholder value creation over the long term.

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