PPG Industries reported net income for the 2Q of fiscal 2007 down 11% to USD 249 million from USD 280 million a year earlier, largely due to an asbestos-related settlement charge, a higher income tax …
PPG Industries reported net income for the 2Q of fiscal 2007 down 11% to USD 249 million from USD 280 million a year earlier, largely due to an asbestos-related settlement charge, a higher income tax rate and certain operating issues in the commodity chemicals business. The results for the 2Q 2007 include an after-tax charge of USD 6 million (USD 0.03 per share) related to a proposed asbestos settlement agreement. The tax rate for the quarter increased to 31.3% from 26.4% a year earlier. Despite difficult conditions in several North American end-use markets, PPG“s sales revenue for the 2Q grew 12% to USD 3.2 billion from USD 2.8 billion in the year earlier period. “PPG“s excellent performance this quarter is a result of our strongest organic volume growth in three years”, says Charles E. Bunch, PPG chairman and chief executive officer. “This has been driven by our well-balanced geographic footprint and ongoing market penetration in both of our Coatings segments and our Optical and Specialty Materials segment. Also supplementing our organic results is our continuing success in integrating last year“s acquisitions, which not only are aiding our sales growth but also delivered double-digit operating margins this quarter”. Performance and Applied Coatings segment sales during the 2Q increased by 26% mainly due to increased sales from acquisitions, improved sales volumes, the positive impact of stronger foreign currencies and higher selling prices. Segment sales at the Industrial Coatings business rose 16%, while Optical and Specialty Materials segment sales increased 13%. Sales at the Commodity Chemicals segment grew 2% due to improved volumes that partially offset lower year-over-year pricing. However, Glass segment sales fell by 4%. For the first six months of fiscal 2007, PPG earned a net income of USD 464 million (USD 2.79 a share) on sales of about USD 5.5 billion. Mr. Bunch noted that the company is progressing on its business portfolio transformation and expects to have tangible results within the next few months.