PPG Industries Inc. was "put to the test" in 2008 by challenging global conditions, its chairman said yesterday, but widespread cost-cutting efforts should help it weather the economic storm.
Last year "was difficult and dynamic" for the paints, glass and chemicals maker, Chairman Charles Bunch said during the Pittsburgh company's annual meeting at the David L. Lawrence Convention Center, Downtown.
Prior to the meeting, PPG reported a first-quarter net loss of $111 million, or 68 cents per share, including $141 million, or 86 cents per share, in charges for a business restructuring that involved previously announced plant closings and job losses.
Last year, PPG reported first-quarter net income of $100 million, or 61 cents per share.
First-quarter sales fell 30 percent to $2.8 billion, from $4 billion a year ago.
Excluding the restructuring charges and charges related to PPG's ongoing asbestos case settlement, net income was $32 million, or 19 cents per share, beating some analysts' estimates of 13 cents.
The decline in sales and income "reflect continued deterioration in the global economy, resulting in lower demand in many of the end-use markets we serve," Mr. Bunch said in a statement released with the earnings report. PPG's automotive and industrial markets continue to be particularly hard hit, he said.
Despite some seasonal growth in the second quarter, Mr. Bunch doesn't expect a major turnaround anytime soon.
The company said last month it would slash about 2,500 jobs, or 6 percent of its work force, as part of the restructuring expected to save PPG about $60 million this year and $140 million annually in the future.
PPG will continue to examine costs this year, Mr. Bunch said, as it remains focused on shifting its portfolio away from traditional businesses such as glass to coatings, optical and specialty products.
It took a major step toward that end last year by selling off 60 percent of its automotive glass and services business, which became a new venture, Pittsburgh Glass Works.
Though it may be moving away from auto glass, the company is still involved in some glass businesses.
Today, U.S. Sen. Arlen Specter, R-Pa., is scheduled to announce PPG will receive funding to develop a technology that will allow residential and commercial windows to capture solar energy. The initiative, to be announced at PPG's Allison Park plant, would be funded by federal stimulus money.
PPG stock closed yesterday up $1.67, or 3.8 percent, at $46.11.
Joyce Gannon can be reached at email@example.com or 412-263-1580.