PPG sets sales record for 1Q 2005

PPG Industries reported on 21 April 2005 net income of USD 95 million, or USD 0.55 a share for the 1Q 2005. The figure includes aftertax charges of USD 91 million, or USD 0.52 a share, for a legal set…

PPG Industries reported on 21 April 2005 net income of USD 95 million, or USD 0.55 a share for the 1Q 2005. The figure includes aftertax charges of USD 91 million, or USD 0.52 a share, for a legal settlement in connection with an adverse ruling in March 2005, and USD 5 million, or USD 0.03 a share, to reflect the net increase in the current value of the company“s obligation under its asbestos agreement initially reported in May 2002. Sales were USD 2.5 billion. Net income adjusted for the non-recurring legal settlement was USD 186 million for the 1Q 2005, an increase of 56% over net income in the 1Q 2004 on a comparable basis. In the 1Q 2004, PPG reported net income of USD 119 million, or USD 0.69 a share, including USD 3 million, or USD 0.02 a share, to reflect the net increase in the value of the company“s obligation under its asbestos agreement. 1Q 2004 sales were USD 2.3 billion. “Our sales in the 1Q were an all-time record for any quarter, reflecting the continued growth in all segments of our balanced business portfolio,” said Raymond W. LeBoeuf, chairman. The record for sales in a quarter had been USD 2.4 billion in the 2Q of 2004. “Our strong earnings performance reflects the strength of our chlor-alkali business coupled with improvements in glass,” LeBoeuf said. “This enabled us to more than offset rising raw material costs for coatings”. “At this point, we see continued strong sales throughout PPG“s businesses. Pricing is up in most of our businesses, particularly chlor-alkali, where we expect continued strong demand. Furthermore, we see global economic expansion continuing, although at a slower and more sustainable pace. Regardless, we expect to generate strong cash flow, which we will continue using to create value for our company and its shareholders.” Coatings sales increased USD 58 million, or 5%, as a result of strengthening foreign currencies and improved selling prices. Operating earnings were down USD 177 million due largely to the impact of the non-recurring legal settlement, amounting to USD 150 million pretax. In addition, inflation, primarily raw materials, exceeded the benefits of higher selling prices, the favorable effect of currency translation and improved manufacturing efficiencies. Price increases were implemented throughout the quarter. Glass sales increased USD 17 million, or 3%, as higher volumes in automotive replacement glass and flat glass businesses and the strengthening of foreign currencies more than offset lower selling prices. Operating earnings were up USD 16 million reflecting improved manufacturing efficiencies, increased volumes, higher equity earnings and lower overhead expenses. These increases exceeded the impact of higher energy and freight costs. Chemicals sales increased USD 154 million, or 34%, on higher selling prices for chlor-alkali products, higher volumes and the strengthening of foreign currencies. Operating earnings were up USD 114 million primarily because of higher selling prices and improved volumes, which more than offset higher energy costs and inflation.