Strong sales in performance and industrial coatings helped deliver a third straight quarterly record to PPG Industries, with $3.5 billion in sales and banner earnings in various coatings markets.
First-quarter sales increased by 13% over the first quarter of FY 2010, the Pittsburgh-based paint and coatings company reported Thursday (April 21)
. PPG said it had notched double-digit percentage sales increases in each major region and higher sales volumes and pricing in all reporting segments.
Coatings Growth Cited
Reported net income for the quarter increased to $228 million, or $1.40 per diluted share. In FY 2010, first-quarter reported net income was $30 million, or 18 cents per diluted share, PPG said.
|Coatings segments delivered strong results in the first quarter, said PPG chairman CEO Charles E. Bunch.|
“We’ve continued our strong earnings momentum and have posted our third consecutive quarterly record,” said Charles E. Bunch, chairman and CEO. “Each of our reporting segments delivered higher year-over-year earnings driven by continued volume growth from a broadening global industrial recovery, including strengthening conditions in Europe.”
Total coatings segment earnings grew by nearly 12% versus the prior-year results, Bunch said.
Coatings segments “continued to deliver strong results,” with higher pricing in every business and “aggressive cost management” to blunt the ever-rising cost of raw materials, Bunch said. PPG is also pursuing product reformulations that employ different polymer technologies and Chinese-produced titanium dioxide.
Selected Segment Results
Performance Coatings segment sales in the first quarter increased by 9%, or $87 million, over the previous year, thanks to higher selling prices and volumes in every region as well as strong sales growth in the aerospace and automotive refinish businesses.
In the protective and marine coatings and architectural coatings – Americas and Asia/Pacific businesses, segment earnings grew $12 million to a first-quarter record of $139 million, as volume and pricing gains and a lower cost structure offset increased raw material costs.
Industrial Coatings segment sales for the quarter rose 15% to $132 million year-over-year, with volumes recovering in each region and in many end-use markets. These were helped by higher pricing and favorable currency translations in each of the segment’s businesses. Q1 segment earnings increased by $15 million to $116 million over the first quarter of FY 2010.
Commodity Chemicals segment sales for the quarter climbed 28%, with earnings reaching $97 million, due to sales improvement and lower natural gas costs. Manufacturing costs also improved, as capacity utilization reached its highest level since 2007.
First-quarter sales for the Architectural Coatings – EMEA segment increased 8% over the prior year. Segment earnings increased by $1 million, to $12 million, for the quarter. Construction activity remained low in developed regions, with no sign of imminent improvement, PPG said.
The Optical and Specialty Materials segment, which includes the silicas business, delivered record first-quarter sales and record earnings for any quarter. Glass segment sales increased 17%, or $38 million.
The report had Bunch forecasting a rosy future of higher prices, strong sales and an active M&A period.
“Looking ahead,” he said, “we remain optimistic and expect similar economic trends in the second quarter, which is seasonally our strongest sales quarter of the year. We anticipate further pricing gains in every segment as we continue to confront raw material cost inflation.”
“Finally, we continue to work on initiatives to deploy our cash to grow earnings. We will continue to apply our disciplined approach toward evaluating acquisitions, and we expect to announce several small- to medium-sized bolt-on acquisitions over the next six to nine months.”