PPG Industries reported record 1Q 2008 sales on 17 April 2008 of USD 3.7 billion, surpassing the prior year“s 1Q results by 41%. Net income for the 1Q was USD 100 million, or USD 0.61 per share, comp…
PPG Industries reported record 1Q 2008 sales on 17 April 2008 of USD 3.7 billion, surpassing the prior year“s 1Q results by 41%. Net income for the 1Q was USD 100 million, or USD 0.61 per share, comprising net income from continuing operations of USD 87 million, or USD 0.53 per share, and income from discontinued operations, net of tax, of USD 13 million, or USD 0.08 per share. Reported net income from continuing operations includes non-recurring acquisition-related costs of USD 89 million aftertax, or USD 0.54 per share, stemming from the company“s 2 January 2008 acquisition of the SigmaKalon Group. Adjusted net income from continuing operations was USD 176 million, or USD 1.07 per share. The company“s tax rate on income from continuing operations for the quarter was 30%. PPG“s sales for the 1Q 2007 were USD 2.6 billion. Net income for the 1Q was USD 194 million, or USD 1.17 per share, comprising net income from continuing operations of USD 176 million, or USD 1.06 per share, and income from discontinued operations, net of tax, of USD 18 million, or USD 0.11 per share. Net income from continuing operations included an aftertax charge of USD 5 million, or USD 0.03 per share, to reflect the net increase in the value of the company“s obligation under its proposed asbestos settlement agreement, which is subject to pending court proceedings. Adjusted net income from continuing operations was USD 181 million, or USD 1.09 per share. The company“s tax rate on income from continuing operations was 23%. “We are very pleased to have delivered solid organic growth despite a slowdown in the overall US economy,” said Charles E. Bunch, PPG chairman and chief executive officer. “We achieved this growth due, in part, to our prior investments in coatings, optical products and emerging regions, which have strengthened our overall portfolio. In addition, the recent acquisition of SigmaKalon contributed to our record 1Q results. This business, which we are successfully integrating, has exceeded our expectations”. Mr. Bunch noted that a key measure of the company“s growth is its total business segment earnings, which increased 17%. “Looking ahead, while we will likely continue to experience a difficult North American economy, we remain confident in our ability to grow both sales and earnings. This is due to our leading products and technologies, and because we have significantly broadened our geographic presence. In fact, the United States and Canada now account for only about 45% of our total sales,” Mr. Bunch said. “We are focused on improving our already strong cash generation, and we intend to use this cash to continue to grow earnings, initially through paying down debt”. Glass segment sales increased USD 8 million, or 3%, based on the positive impact of stronger foreign currencies and increased selling prices. These were slightly moderated by lower sales volumes. Segment earnings improved by USD 13 million due to lower manufacturing costs. The absence of a prior year write-off of an investment in a fiberglass joint venture offset the negative impact of inflation. Performance Coatings segment sales in the 1Q increased USD 259 million, or 30%, as a result of the SigmaKalon and Barloworld acquisitions, the positive impact of stronger foreign currencies, increased selling prices and improved volumes. Industrial Coatings segment sales for the quarter increased USD 189 million, or 22 %, as a result of the SigmaKalon acquisition, stronger foreign currencies and improved volumes in all businesses. Architectural Coatings EMEA (Europe, Middle East and Africa) is a newly formed segment comprising about 70% of acquired SigmaKalon sales. Segment sales for the quarter were USD 536 million. Optical and Specialty Materials segment sales for the quarter increased USD 44 million, or 18%, as a result of improved volumes, particularly in the optical products business. Stronger foreign currencies and increased selling prices also added to growth. Segment earnings were up USD 11 million due to higher sales volumes and despite higher advertising expenses related in part to the launch of Transitions Optical“s next-generation lens product.