PPG Industries' acquisition in April of the North American operations of Dutch paints maker AkzoNobel gave the Pittsburgh company a big boost in the second quarter, helping to push sales to record levels of $4.1 billion, up 16 percent from a year ago.
Wall Street reacted positively, sending shares in PPG to a new 52-week high of $161.47 before the stock closed at $160, up by 2 percent, or $3.14.
After one-time acquisition costs, net income fell by 6 percent from a year ago, to $341 million, or $2.35 per share. Not including the acquisition charges, adjusted net income was $356 million, or $2.45 per share, beating analysts' average estimate of $2.34 per share.
AkzoNobel -- which includes brands such as Glidden paints and Liquid Nails adhesives -- generated $475 million in revenues during the quarter, exceeding PPG's expectations.
Besides increased sales from the Akzo brands, chairman Charles Bunch told analysts in a conference call that PPG's paints segment benefited from recent smaller purchases including Deft, which makes industrial and aerospace paints; and Spraylat, which produces coatings for the automotive and transportation industries.
The Downtown-based company, which has been shifting its portfolio from glass and commodity chemicals to paints and specialty chemical products like opticals, is actively seeking more coatings acquisitions, he told analysts.
The company also said its board Thursday approved a $102 million restructuring plan, which will focus on integrating the AkzoNobel operations in North America but will also include cost-reduction actions in some other businesses that PPG described as "challenging," including protective and marine coatings, and some segments in Europe such as architectural coatings and fiber glass.
Charges for the restructuring program will be reflected in the third quarter, PPG said, and will include cash charges of about $97 million and non-cash charges of about $5 million.
Joyce Gannon: email@example.com or 412-263-1580. First Published July 18, 2013 10:00 AM