PPG shares slide 1.7% after disclosure of accounting issue

Shares of paint maker PPG Industries Inc. PPG, -2.06%slid 1.7% in early trade, after the company disclosed an accounting issue that it is now probing. PPG said as it was finalizing its first-quarter earnings, it received a report from its internal system regarding possible violations of its accounting policies.

Specifically, it said certain expenses were not properly accrued. The company said a review founds $1.4 million of such expenses, which are now accounted for. However, its audit committee is investigating the report, which suggests up to $5 million in expenses were not properly accrued. "The company is currently unable to predict the timing or outcome of the investigation and will move with diligence," it said in a statement. PPG made the disclosure as it reported first-quarter net income of $353 million, or $1.40 a share, up from $334 million, or $1.29 a share, in the year-earlier period. Sales rose to $3.8 billion from $3.5 billion. The FactSet consensus was for EPS of $1.39 and sales of $3.7 billion. Shares have fallen 4.8% in 2018 so far, while the S&P 500 SPX, -0.34%has gained 1%.