PPG reports record fourth quarter and full-year 2013 results

PPG Industries (NYSE:PPG) today reported record fourth quarter 2013 net sales from continuing operations of $3.7 billion, up $459 million, or 14 percent, versus the prior year.

Fourth quarter 2013 reported net income from continuing operations was $254 million, or $1.78 per diluted share.  Fourth quarter 2013 adjusted net income from continuing operations was $258 million, or $1.81 per diluted share, which excludes $4 million, or 3 cents per diluted share, for acquisition-related costs. Fourth quarter 2012 reported net income and earnings per diluted share from continuing operations were $191 million and $1.23, respectively, and adjusted net income from continuing operations was $194 million, or $1.25 per diluted share, respectively, excluding $3 million, or 2 cents per diluted share, for acquisition-related costs.

“Our record fourth quarter financial performance caps off one of the most successful years in the company’s history, both financially and strategically,” said Charles E. Bunch, PPG chairman and chief executive officer. “With the 45 percent increase in earnings per share versus last year, we have now delivered 14 consecutive quarters of record adjusted earnings, illustrating the benefits of our strong coatings portfolio, broad global footprint, prudent cash deployment and measurable results from our strategic actions.

“We achieved record fourth quarter financial results, as higher earnings stemming from our continuing operating and cost discipline are now being coupled with a higher level of organic sales growth,” Bunch said. “We continued to outpace industry growth in aerospace and automotive OEM coatings. More broadly, we also benefited from stabilizing regional demand in Europe, as our year-over-year coatings volumes in that region were flat in the fourth quarter following nine consecutive quarters of decline.

“On a full-year basis, we remained focused on creating shareholder value, including completion of several considerable strategic actions to shift to a more consistent and higher-growth business portfolio,” Bunch added. “We delivered all-time record full-year earnings, more than replacing the earnings from the separated commodity chemicals business, as we continue to benefit from aggressive management of our existing businesses combined with earnings accretion from cash deployed. During 2013 we maintained a balanced use of cash, spending $1.5 billion on acquisitions and capital spending focused on growing our company, and continuing our heritage of rewarding shareholders by returning about 75 percent of our cash from operations, or $1.35 billion, in dividends and stock repurchases.”

Looking ahead, Bunch said, “We expect to realize benefits from modest global growth. Regionally, we expect growth to remain broadest in the U.S. economy, spanning several coatings end-use markets. Emerging-regions growth, while still uneven, is expected to continue at a solid pace for PPG, comparable to recent trends. In Europe, which represents about one-third of our sales, economies appear to be improving but remain fragile. In 2014, we anticipate measured growth in that region, and we expect to realize solid earnings leverage due to the actions we have taken the past two years to significantly reduce our regional cost structure.”

Bunch also said the company remained slightly ahead of schedule on achieving targeted acquisition-related cost synergies relating to the North American architectural coatings acquisition. He added that the restructuring program approved in the third quarter 2013 is focused primarily on achieving the remaining synergies, and those actions are now underway. As a result, the company expects incremental cost savings of between $75 million and $90 million in 2014.

“Lastly, we ended the year with a strong balance sheet and cash position, which we expect to be supplemented by continued strong free cash flow, along with the receipt of about $1.5 billion in after-tax proceeds from the pending sale of our ownership interest in the Transitions Optical joint venture. Over the next 18 to 24 months, we anticipate deploying between $3.0 billion and $4.0 billion of cash in a disciplined manner on incremental earnings-growth initiatives, and returning cash to shareholders,” Bunch concluded.

The company today reported year-to-date cash from continuing operations of about $1.8 billion, a 15 percent increase versus the prior year. Full-year capital spending was slightly more than $500 million. Cash used for business acquisitions totaled about $1.0 billion. The company also noted that 2013 marked the 42nd consecutive year of increasing annual per-share dividend payouts, with cash dividends paid of about $350 million. The company also repurchased $1.0 billion, or 5.7 million shares, of PPG stock. PPG ended the year with cash and short-term investments totaling $1.75 billion.

Read more here.

600450 PPG reports record fourth quarter and full-year 2013 results glassonweb.com
Date: 20 January 2014
Source: www.ppg.com

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