PPG Industries produced a 5 percent increase in sales and beat analysts’ earnings estimates by 6 cents in the second quarter.
The Downtown-based coatings and glass producer reported record second-quarter sales of $4.1 billion, compared to $3.9 billion in the year-ago period. Net income was $393 million, or $2.80 per diluted share, up from $318 million, or $2.19 per share, in the year-ago quarter.
PPG attributed the gain to investments in the aerospace and automotive markets. “We’re very well-positioned with some of the [automotive] companies that have been growing fastest on a global basis,” said CEO Charles Bunch in a conference call Thursday with analysts.
Sales also were buoyed by consistent volume growth and year-over-year earnings in each major region, including 28 percent growth in the European market. “Europe represents about one-third of our total sales, and we expect this earnings leverage to continue,” said Vincent Morales, vice president of investor relations.
By comparison, the company reported a 12 percent increase in adjusted earnings for the U.S. and Canada. PPG said that, despite the setback of a “harsh winter,” the region has seen continued improvement across most end-markets. This includes U.S. commercial construction, where demand levels remain well above pre-recession levels.
Adjusted net income from continuing operations, excluding acquisition-related costs of $2 million plus another $3 million in U.S. pension settlement costs, was $398 million. That marked a 24 percent increase from adjusted profit of $331 million in the second quarter of 2013.
Adjusted earnings set an all-time quarterly record at $2.83 per share, a 24 percent increase from $2.45 in the year-ago quarter. Earnings per diluted share exceeded the average analysts estimates as calculated by Thomson Financial by 6 cents.
During the second quarter, PPG closed on several small acquisitions, including Pittsburgh’s Masterwork Paint Co. and Canal Supplies Inc., a distributor of protective and marine coatings in Panama. The two are expected to generate $75 million in annual sales.
In June, the coatings giant announced plans for a $2.3 billion acquisition of Comercio Comex S.A., an architectural and industrial coatings leader based in Mexico City. The deal still requires approval from regulators.
Also on Thursday, PPG announced the appointment of Michael McGarry, current executive vice president, to chief operating officer, effective Aug. 1.
Wall Street reacted positively, sending the company’s shares to a high of $209.75 before the stock closed at $207.70, up by 0.93 percent, or $1.91.
Rocio Labrador: email@example.com or 412-263-1370. First Published July 17, 2014 10:57 AM