DOW JONES NEWSWIRES 
 

PPG Industries Inc.'s (PPG) second-quarter earnings fell 42% on slumping sales as the paint, glass and chemical maker handily topped analysts' profit expectations on a higher margin.

Chairman and Chief Executive Charles E. Bunch noted profit was much higher than in recent quarters while sales were steady month-to-month. "This gives us a degree of confidence that most markets have stabilized," he said, "albeit at considerably lower levels than prior years."

Bunch expects market demand to improve this quarter, "but only mildly."

PPG has continued to struggle as industrial and automotive customers cut output and hold off on restocking inventories, hitting PPG's global automotive segment especially hard. In March, the company announced a restructuring plan, closing plants and cutting jobs, meant to eliminate $60 million in annual costs in 2009, in addition to a plan from September to save $100 million by the end of this year.

PPG reported a profit of $146 million, or 89 cents a share, down from $250 million, or $1.51 a share, a year earlier. Revenue slid to $3.1 billion from $4.5 billion.

A survey of analysts by Thomson Reuters resulted in an average per-share earnings estimate of 75 cents on $3.3 billion in revenue.

Gross margin rose to 39.1% from 36.8%.

Earnings at PPG's performance-coatings segment, the company's biggest by sales, fell 7.6% while revenue dropped 16%. Nearly all of the profit drop and 40% of the sales decline was due to currency impacts.

Industrial-coatings earnings slumped 74% while sales dropped 36% as the business was hurt by tumbling auto production.

PPG's shares recently rose 0.9% to $46.50 premarket. The stock has risen nearly two-thirds since a 14-year low in March.

-By Joan E. Solsman and Kevin Kingsbury, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com