PPG expects another Covid-19 wave to hit workers in China
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PPG Industries (NYSE:PPG) on Friday said a second wave of Covid-19 likely will affect its business in China after an outbreak last month hindered operations.
“Our base case is that there will be, to some degree, a second wave after Chinese New Year of infections,” Tim Knavish, CEO of PPG, said in a regularly scheduled call with analysts. “Beyond that, we’re expecting modest growth for the year, low single digits.”
Disruptions from the pandemic in China magnified a decline in the quarterly profit of the maker of paints, coatings and specialty materials. Company management plans a quick recovery from another wave of coronavirus infections and better results for 2023.
Before workers started calling in sick during the last bout with Covid-19, PPG’s 19 factories in China had almost no employee absenteeism. Operations returned to normal about three weeks after the surge in cases, when more than half of employees didn’t go to work.
Workers who visit families in remote locations for new year celebrations and return may drive a jump in infections.
“We do believe there will be a short but acute second wave, so that’s why we’re a bit more cautious,” Knavish said.
PPG (PPG) yesterday said Q4 sales were littled changed from a year earlier at $4.19 billion, and net income slumped 11% to $238 million.
The company's stock rose as much as 7.9% on Friday before giving back some of its gains. PPG (PPG) fell 23% in the 12-month period through January 19, compared with a 14% decline for the Standard & Poor's 500 stock index (SP500).