PPG profit surges on Latin American, Asian demand
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PPG Industries said strong industrial demand in Latin America and Asia helped offset weaker construction markets in North America and Europe, and triggered robust second-quarter results for the Pittsburgh coatings, glass and chemicals maker.
Net income for the quarter jumped by 86 percent, to $272 million, or $1.63 per share, while sales rose 11 percent to $3.5 billion. Net income included a charge of 1 cent per share related to a proposed asbestos case settlement. Excluding the charge, adjusted net income was $274 million, or $1.64 per share, beating analysts' average estimate of $1.43 per share.
"You'd hardly know there were concerns about the economy out there," Frank Mitsch, a chemicals industry analyst with BB&T Capital Markets, remarked during a conference call Thursday with PPG executives.
PPG's shares closed at $64.60, up 8 cents.
Chairman Charles Bunch said earnings per share were hovering near pre-recession levels. Generating strong performances in the quarter were the industrial coatings segment, optical and specialty materials, commodity chemicals and sales of fiberglass used in industrial products .
"I'm encouraged with the earnings recovery and believe we are well positioned to capitalize on what we anticipate to be a continued, gradual, global economic recovery," he said.
The company is considering several "small to midsize" acquisitions that he said could be as large as $250 million.
Coatings sales benefited from recovery in the automotive industry and especially from strong demand from carmakers in China, he said.
PPG's weakest segment, said Mr. Bunch, was glass sold in North America for commercial and residential applications because of continued sluggish construction markets.
"We expect the overall construction market to remain low for the foreseeable future," said Robert Dellinger, PPG's chief financial officer.
The company raised its regular quarterly dividend from 54 cents to 55 cents per share.
Separately, it announced several executive appointments including J. Rich Alexander and Pierre-Marie De Leener to executive vice president. Both will join PPG's executive committee.
Mr. Alexander was senior vice president, performance coatings.
Mr. De Leener, who joined PPG when it acquired paint company SigmaKalon in 2008, had been senior vice president, architectural coatings for Europe, Middle East and Africa, and president of PPG Europe.
First Published July 16, 2010 12:00 am
