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PPG Posts Record Sales for Any Quarter

Published on 2005-07-22. Author : SpecialChem

PITTSBURGH -- PPG Industries (NYSE:PPG - News) reported second quarter net income of $231 million, or $1.34 a share, including aftertax charges of $12 million, or 7 cents a share, for a previously announced debt refinancing, and $2 million, or 1 cent a share, to reflect the net increase in the current value of the company's obligation under its asbestos settlement agreement reported in May 2002. Sales were $2.66 billion, a record for any quarter.

That compares with second quarter 2004 net income of $187 million, or $1.08 a share, which includes an aftertax charge of $6 million, or 3 cents a share, to reflect the net increase in the value of the company's obligation under the asbestos settlement agreement. Sales for the second quarter of 2004 were $2.43 billion.

For the first six months of 2005, PPG recorded net income of $326 million, or $1.89 a share, which includes aftertax charges of $91 million, or 52 cents a share, for a nonrecurring legal settlement; $12 million, or 7 cents a share, for debt refinancing; and $7 million, or 4 cents a share, to reflect the increase in the value of the company's obligation under the asbestos settlement agreement. Sales for the first half of 2005 were $5.15 billion.

For the first six months of 2004, PPG recorded net income of $306 million, or $1.77 a share, which includes an aftertax charge of $9 million, or 5 cents a share, to reflect the increase in the value of the company's obligation under the asbestos settlement agreement. Sales for the first half of 2004 were $4.69 billion.

"We not only generated record sales for any quarter, we also enjoyed one of our best quarterly earnings performances ever," said Charles E. Bunch, chairman and chief executive officer. "In addition, we made progress in restoring our coatings margins and expect this improvement to accelerate the remainder of the year.

"While the global economy shows signs of moderating, we see continued strength in our coatings and chemicals segments, which achieved record sales each of the past two quarters. This measurable proof validates our earnings growth strategies and positions PPG to continue generating shareholder returns."

Coatings sales increased $96 million, or 7 percent, as a result of improved selling prices across all businesses except automotive, the impact of foreign currencies and higher volumes in architectural, aerospace and automotive. Operating earnings were down $14 million largely because of the impact of inflation, primarily raw materials, which exceeded the benefits of higher selling prices, higher volumes, slightly better costs and the impact of foreign currencies.

Glass sales decreased $3 million, or 1 percent, as lower selling prices and lower volumes across all businesses except automotive replacement glass exceeded the impact of foreign currencies. Despite improved manufacturing efficiencies, operating earnings were down $18 million as a result of inflation, including higher energy costs; lower selling prices; and lower other income.

Chemicals sales increased $134 million, or 27 percent, on higher selling prices for chlor-alkali products, higher volumes in optical and the impact of foreign currencies. Operating earnings were up $102 million primarily due to higher selling prices and improved volumes. These increases exceeded the impact of higher energy and other inflation costs and higher overhead expenses, related primarily to optical advertising.

Forward-Looking Statement

Statements in this news release relating to matters that are not historical facts are forward-looking statements reflecting the company's current view with respect to future events and financial performance. These matters involve risks and uncertainties that could affect the company's operations, as discussed in PPG Industries' periodic reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission. Accordingly, many factors could cause actual results to differ materially from the company's forward-looking statements.

Among these factors are increasing price and product competition by foreign and domestic competitors, fluctuations in cost and availability of raw materials, the ability to maintain favorable supplier relationships and arrangements, economic and political conditions in international markets, the ability to penetrate existing, developing and emerging foreign and domestic markets, which also depends on economic and political conditions, foreign exchange rates and fluctuations in those rates, and the unpredictability of possible future litigation, including litigation that could result if the asbestos settlement discussed in PPG's reports filed with the Securities and Exchange Commission does not become effective. Further, it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.

Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on the company's consolidated financial condition, operations or liquidity.

Source: PPG Industries


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