By Michael Dabaie
PPG Industries Inc. stated on Tuesday it expects gross sales volumes within the third quarter of 2021 to be $ 225 million decrease to $ 275 million than the corporate forecast initially of the third quarter. , citing worsening provide disruptions and components shortages for patrons.
The shares fell 5%, to $ 148, in pre-market buying and selling.
The producer of coatings, specialty supplies and glass merchandise stated gross sales volumes have been affected by growing disruptions in uncooked materials provide, additional cuts in buyer manufacturing attributable to shortages of components akin to as semiconductor chips and chronic logistics and transportation issues in areas, together with the USA, Europe and China.
The corporate has introduced that it’s withdrawing its steerage for the third quarter and the yr 2021.
The corporate additionally stated commodity inflation for the third quarter tended to be greater than beforehand reported, at round $ 60 million to $ 70 million.
PPG stated coating product provide disruptions have deteriorated additional because the firm’s July earnings announcement, attributable to a number of extra drive majeure claims and decrease materials allocations from some suppliers. .
The corporate stated it was assessing the total impact of Hurricane Ida, which might embrace extra results on the availability chain.
PPG stated combination international financial demand stays sturdy and inventories in lots of its end-use channels are at very low ranges.
When provide circumstances normalize, the corporate stated it continues to anticipate sturdy gross sales development by way of 2022.
The corporate stated it was making measurable progress implementing promoting worth will increase to assist offset excessive uncooked materials prices, and is searching for additional will increase. Total worth will increase for the third quarter are estimated at round 5%.
In July, PPG stated it expects third quarter combination internet gross sales to develop from 21% to 23%, together with acquisitions, with decrease single-digit share natural gross sales development in comparison with the third. quarter 2020.
“Though we delivered sturdy adjusted EPS within the second quarter, our outcomes have been decrease than our April forecast. Along with the impression of provide disruptions on income, we skilled a steady improve in uncooked materials and transportation prices all through the quarter, ”stated the Managing Director. Michael H. McGarry stated within the July second quarter earnings launch.
Write to Michael Dabaie at [email protected]