Boosted by growth in its offshore markets, the acquisition of Dutch paints maker Sigma Kalon and price increases, PPG Industries' second-quarter sales jumped by 42 percent to $4.5 billion.
The coatings, glass and chemicals maker said net income rose slightly to $250 million, or $1.51 per share, from $249 million, or $1.50 per share, in the year-ago quarter.
Excluding special items, adjusted net income was $269 million, or $1.62 per share, easily beating analysts' estimates of $1.53 per share.
The better-than-expected results pushed PPG's shares up by nearly 7 percent to close at $61.04, the stock's biggest gain in five years.
The company's strong performance in the face of a sluggish economy points to its success in shifting its focus to paints and specialty products, said Chairman Charles Bunch.
PPG is aggressively expanding its global reach in coatings -- its purchase of SigmaKalon in January for $3 billion was the largest acquisition in its history -- while it sheds more traditional businesses. Last week, it announced an agreement to sell a controlling stake in its automotive glass and services business for $330 million to a new venture to be formed by investment firm Kohlberg & Co.
The second-quarter results reflect several charges related to the sale of the auto glass business, including one-time, after-tax charges of $11 million, or 7 cents a share, related to depreciation expenses and $12 million, or 7 cents a share related to benefits changes. PPG expects to close the deal with Kohlberg in the third quarter.
The SigmaKalon acquisition is "tracking ahead" of 2008 targets, William Hernandez, chief financial officer, said in recorded comments made available with the earnings report.
SigmaKalon added about 30 percent to the company's total sales and increased combined coatings sales by 50 percent, he said.
While weak residential construction and automotive markets in the United States dragged down sales volumes, the declines were offset by growth in Asia, Latin America and Europe and gains in commodity chemicals, aerospace, optical and specialty materials, Mr. Hernandez said.
Mr. Bunch said PPG is implementing price increases in commodity chemicals and other businesses to help offset inflationary pressures.
Joyce Gannon can be reached at email@example.com or 412-263-1580.