PPG plunges after providing preliminary Q3 results amidst 'Sluggish' economy'

Shares of industrial coatings maker PPG Industries (PPG) are declining after the company updated its third quarter financial view. The company intends to initiate a review of its cost structure in the midst of what the company calls "a sluggish economic environment."

WHAT'S NEW: Prior to the opening of trading this morning, PPG said it sees Q3 earnings per share of $1.54-$1.57 on revenue of approximately $3.8B. Analysts on average were expecting Q3 EPS of $1.71 on revenue of $3.84B. Michael McGarry, PPG chairman and CEO pointed out in a statement that the company's Q3 EPS includes benefits from an improvement in PPG's global volume growth rate. Since last year, company volumes increased more than 1.5%, "despite slower-than-expected growth in Europe." The CEO expressed his disappointment with Q3 EPS, noting that PPG is operating in a weak economy, "with no clear near-term catalyst for improving global GDP growth." Because of the "sluggish" economic environment PPG is "reviewing potential actions" to lower its overall cost structure.

WHAT'S NOTABLE: The company also announced that its board has authorized a $2B share repurchase program. This program is in addition to the company's existing share repurchase authorization which was approved in 2014 and had approximately $520M remaining as of September 30. The company has deployed approximately $1.85B of cash on acquisitions and share repurchases, including about $250M of share repurchases completed during Q3, against its previously stated target of $2B-$2.5B for 2015 and 2016 combined.

PRICE ACTION:In midday trading, PPG Industries is down over 9% to $92.91 per share.

OTHERS TO WATCH: Peers of PPG in the paint and coatings sector are also lower at midday, including Sherwin-Williams (SHW), Valspar (VAL), RPM International (RPM), Axalta Coating Systems (AXTA), and Akzo Nobel (AKZOY).