(Reuters) - Chemical company PPG Industries Inc (PPG.N) said on Friday it expected to post a third-quarter loss, its first since March 2009, due to charges related to a pension settlement.
PPG’s shares fell 8.1 percent to a more than seven-month low of $93.91, wiping out more than $2.2 billion of market value, in morning trading on Friday.
The company said it expected a loss of 74 cents-77 cents per share from continuing operations for the three months ended September, compared with a profit of $1.52 per share a year earlier.
Reported earnings would include previously disclosed pension settlement charges that totaled $2.31 per share, PPG said.
PPG said in June it would transfer pension benefits and annuity administration to Massachusetts Mutual Life Insurance Co and Metropolitan Life Insurance Co, and expected to take non-cash settlement charges of about $500 million-$600 million after-tax in the third quarter. (1.usa.gov/28Zw2Hz)
Excluding items, PPG said it expected a profit of $1.54-$1.57 per share from continuing operations.
Analysts on average were expecting an adjusted profit of $1.71 per share, according to Thomson Reuters I/B/E/S.
The company, which sells paints, coatings and materials, said it expected net sales of about $3.8 billion, in line with the average analyst estimate.
“We are disappointed with this quarter’s EPS growth rate as we continue to operate in a sluggish economic environment with no clear near-term catalyst for improving global GDP growth,” Chief Executive Michael McGarry said.
Pittsburgh, Pennsylvania-based PPG said its board had authorized a $2 billion buyback program. This is in addition to about $520 million remaining under an existing program.
The company has been cutting costs following its acquisition of REVOCOAT, a global supplier of sealants, adhesives and damper products for the automotive industry, in April 2015.
PPG has since cut about 1,700 jobs and has also sold its flat glass unit to Mexican glass manufacturer Vitro (VITROA.MX) for about $750 million.
Reporting by Anet Josline Pinto in Bengaluru; Editing by Sriraj Kalluvila