Coatings drive PPG's strong 2Q results

Sales improved across the three major business units at PPG Industries Inc., but an 8 percent gain in its coatings business was the major driver behind a 6 percent gain in second-quarter revenue, the company said Thursday.

Pittsburgh-based PPG said sales for the quarter ended June 30 reached a record $2.43 billion, compared to $2.3 billion in last year's period. In addition to the 8 percent gain in coatings sales, PPG said glass and chemicals sales each grew 2 percent.

"Our strong performance in the quarter reflects the benefits of a growing economy, and more important, the consistent application of strategies that have generated profitable growth in our coatings segment, the continued success of our optical products and our relentless focus on reducing costs," chairman and chief executive Raymond LeBoeuf said in a prepared statement.

PPG said net income rose 20 percent to $183 million from $152 million in the prior period. The company earned $1.06 a share, compared to 89 cents last year.

Excluding after-tax charges of $3 million, or 2 cents a share, related to expensing stock options, and $6 million, or 3 cents a share, to reflect an increase in the value of PPG's obligations under an asbestos settlement, the company earned $1.11 a share. That topped 12 analysts' average estimate of $1.08. A year ago, PPG earned 94 cents a share when special items were excluded.

Coatings sales reached $1.35 billion in the second quarter, PPG said, driven by stronger volumes in areas including architectural, industrial and automotive markets.

Glass sales rose to $584 million as stronger volumes in fiber glass, flat glass an automotive original equipment offset lower selling prices for automotive replacement products.

PPG said chemicals sales increased to $491 million on higher volumes for commodity chemicals and optical products, as well as stronger foreign currencies. Those factors helped offset lower prices for commodity chemicals.

Mr. LeBoeuf said PPG expected to see continued economic strength, although he cautioned some sectors were healthier than others.

"The overall expansion, however, continues," Mr. LeBoeuf said.

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