Financials

PPG reports record high sales

With second quarter net income of $280 million, or $1.68 a share, on sales of $2.82 billion, officials at PPG Industries of Pittsburgh reported all-time record first quarter sales in a July 20 release. In the second quarter last year, the company’s net income was $231 million, or $1.34 a share.

For the first six months of this year, PPG’s net income was $464 million, or $2.79 a share, according to the release. For the first six months of last year, the company’s recorded net income was $326 million, or $1.89 a share.

“Our results demonstrate that we're achieving our objective of delivering profitable growth," said Charles E. Bunch, chairman and chief executive officer, in the release. "In coatings and optical products, which represent nearly two-thirds of our portfolio, our momentum continues. Collectively, coatings and optical products grew at more than 10 percent this quarter.

"Looking ahead, funding growth initiatives, such as the five acquisitions we announced in the second quarter, remains a priority for our free cash flow,” Bunch said. “Although growth is moderating to more sustainable levels in North America, we see continued economic expansion worldwide."

Glass sales increased $30 million, or 5 percent, because of higher volumes across most businesses, according to the release.

“In glass, our architectural flat-glass business, which we renamed performance glazings to better convey our value-added focus, increased sales nearly 15 percent to a new first quarter sales record, driven by our value-added product supplied to a robust commercial construction market,” said William H. Hernandez, senior vice president and chief financial officer, in a July 20 Webcast.

Year-over-year, glass margins decreased slightly due to higher natural gas pricing, Hernandez said in the Webcast. “Partially offsetting the natural gas cost were strong selling price and volume increases in our performance glazings business,” he said. Additional manufacturing efficiencies also assisted glass earnings. “Total PPG manufacturing efficiencies were about $30 million, with about three-fourths of that total stemming from our glass business,” he said.

From first quarter 2005 to the first quarter of this year, glass sales improved by 2 percent as a result of volume gains, Hernandez said. “Sales in original equipment manufacturers’ glass were down 1 percent, with price down 1 percent, volumes up 1 percent and currency subtracting 1 percent,” he said. “The volumes remain fairly consistent with our glass customer mix in the North American automotive industry. Looking ahead, Global Insight [the economic research company] predicts an overall production decline in the second quarter for the big three automakers. Auto-replacement glass sales were flat.”

Performance glazings sales improved 13 percent resulting from strong volume gains as a result of robust commercial construction, Hernandez said. “Also, our contractual fuel surcharges added pricing gains which, in part, offset historically high natural gas pricing,” he said. “Our new Texas coater, which produces energy-efficient glass for the southeast portion of the United States, started production late in the quarter.”

Coatings sales increased $129 million, or 9 percent; and chemical sales increased $9 million, or 1 percent, according to the release.

PPG’s board of directors also announced a regular quarterly dividend of 48 cents a share, payable Sept. 12 to shareholders of record Aug. 10, according to a July 20 Business Wire report. The company has increased shareholder payments for 34 consecutive years, paying constant dividends since 1899, according to the wire report.

PPG has 108 manufacturing plants and affiliates in 23 countries.

 

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