PPG Industries reported today third quarter net income of $148 million, or 87 cents a share, including aftertax income of $15 million, or 9 cents a share, to reflect the decline in value of PPG stock included in a previously reported asbestos settlement agreement. Excluding this income, net income was $133 million, or 78 cents a share. Sales were $2.07 billion. This compares with third-quarter 2001 net income of $93 million, or 55 cents a share, on sales of $2 billion.
For the first nine months of 2002, PPG recorded a net loss of $163 million, or 96 cents a share, including one-time, aftertax charges of:
-- $480 million, or $2.83 a share, for the asbestos settlement;
-- $52 million, or 31 cents a share, for restructuring; and
-- $9 million, or 5 cents a share, for the cumulative effect of a required accounting change.
Excluding these items, net income was $378 million, or $2.23 a share. Sales were $6.08 billion. This compares with nine-month 2001 net income of $304 million, or $1.80 a share, including a $71 million aftertax restructuring charge. Excluding the charge, net income was $375 million, or $2.22 a share. Sales were $6.26 billion.
"Although we are seeing some improvements, the global economy remains uncertain," said Raymond W. LeBoeuf, chairman and chief executive officer. "However, the strategic steps we have taken in recent years to improve our business mix have enabled us to increase earnings and the consistency of those earnings. In addition, our relentless focus on cost reductions and cash generation has enabled us to reduce our debt, and for the 31st consecutive year, increase dividends, which we announced last quarter.
"Amid the present economic uncertainty, which may continue into next year," LeBoeuf added, "I believe our actions over the past few years will enable PPG to continue its 30-year trend of generating higher and higher earnings per share with each business cycle."
Consistent with previous disclosures, third quarter 2002 earnings included approximately 11 cents a share of higher pension and retiree medical costs, which were partially offset by the required accounting change eliminating goodwill amortization of 5 cents a share.
Coatings sales increased 6 percent as volumes increased for every business except aerospace. The coatings segment generated record third-quarter earnings, up 45 percent from a year ago, on the strength of volume gains, lower raw material costs and the benefit of goodwill no longer being amortized. This was offset in part by higher pension and retiree medical costs and higher selling costs for the architectural business.
Glass sales and earnings were down on lower volumes and prices and higher pension and retiree medical costs, despite higher volumes in automotive OEM, overhead reductions in every business and greater manufacturing efficiencies.
Chemical sales increased on stronger volumes in all businesses, especially optical products. Earnings for the third quarter of 2002 benefited from stronger volumes, improved manufacturing efficiencies, lower energy costs and lower environmental remediation expenses. This was offset in part by lower selling prices in commodity chemicals, higher selling costs from the optical business and higher pension and retiree medical costs.
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