PPG: glass sales flat in 3Q 2008

PPG Industries on 16 October 2008 reported record sales for the 3Q of USD 4.2 billion, surpassing the prior year“s 3Q results by 37%. Reported net income for the 3Q was USD 117 million, or USD 0.70 p…

PPG Industries on 16 October 2008 reported record sales for the 3Q of USD 4.2 billion, surpassing the prior year“s 3Q results by 37%. Reported net income for the 3Q was USD 117 million, or USD 0.70 per share. Adjusted net income excluding unusual items was USD 227 million, or USD 1.37 per share. “Our financial performance this quarter demonstrates both the successful execution of our transformation strategy and the continued strength of our commodity chemicals business,” said Charles E. Bunch, PPG chairman and chief executive officer. “Over the past several years, we have become a more resilient company by expanding our geographic reach, entering new end-markets, and strengthening our ability to generate cash. In the quarter, our adjusted earnings per share were comparable with last year despite the negative impacts from two US Gulf Coast hurricanes and significantly weaker automotive OEM production. “Financial discipline and flexibility remain PPG hallmarks. We have further strengthened our balance sheet by already exceeding our full-year debt-reduction goals and increasing our cash on hand,” Mr. Bunch added. The company reported that year-to-date cash from operations has risen about 50% from 2007, that net debt payments for the year totaled approximately USD 650 million, that cash on hand was about USD 500 million at quarter-end, and that US commercial paper outstanding was about USD 175 million. “We have taken proactive steps to continue to strengthen the company, including divesting the automotive glass business and initiating business restructuring. These steps will provide future financial benefits,” Mr. Bunch said. During the quarter, the company finalized the sale of an approximate 60% interest in its automotive glass and services business, and it announced business restructuring that will result in expected savings at an annual rate of approximately USD 100 million by the end of 2009. Reported 3Q 2008 net income includes aftertax charges of USD 110 million for business restructuring and USD 3 million to reflect the net increase in the current value of the company“s obligation under its proposed asbestos settlement agreement reported in May 2002, which is pending court proceedings. Net income also includes an aftertax gain of USD 3 million on the divestiture of the automotive glass and services business. PPG“s sales for the 3Q 2007 were USD 3.1 billion. Reported net income for the 3Q 2007 was USD 191 million and adjusted net income from continuing operations was USD 231 million. Reported net income for the 3Q 2007 was comprised of net income from continuing operations of USD 213 million, and a loss from discontinued operations from the former fine chemicals business, net of tax, of USD 22 million. Reported net income from continuing operations included aftertax charges of USD 11 million for pension and other post-employment benefits (OPEB) curtailments related to the automotive glass and services business; USD 4 million for acquisition-related costs; and USD 3 million to reflect the net increase in the current value of the company“s obligation under its proposed asbestos settlement agreement. Total adjusted net income, including discontinued operations, was USD 228 million. Optical and Specialty Materials segment sales for the quarter increased USD 33 million, or 13%, as a result of improved volumes in the optical products business. Stronger foreign currencies and increased selling prices also aided sales growth. Segment earnings were up USD 6 million, or 11%, due to higher optical products volumes that were partially offset by higher marketing expenses related to volume growth. Glass segment sales, including the automotive glass and services business, were flat compared with the prior year. Higher selling prices were equally offset by lower volumes. Segment earnings decreased by USD 18 million, or 51%, due to lower volumes and higher inflation, which was only partially offset by higher selling prices and lower manufacturing costs. The automotive glass and services business was divested on 30 September 2008. Third quarter 2008 results for that business alone were sales of USD 229 million and an aftertax loss of USD 3 million. Third quarter 2007 results for automotive glass and services were sales of USD 249 million and aftertax earnings of USD 5 million.