PITTSBURGH -- PPG Industries (PPG) has reported sales of $3.5 billion for the third quarter, an increase of 7 percent versus the prior year’s third quarter. Third quarter net income was $262 million, or $1.58 per share. Third quarter 2009 sales were $3.2 billion, and net income was $159 million, or 96 cents per share.
 
“Our record third quarter earnings reflect the benefits of the strategic initiatives we’ve undertaken to broaden our geographic footprint – especially in high-growth emerging regions – and the diversity of the end-use markets we serve,” said Charles Bunch, PPG chairman and CEO. “In addition, our lower overall cost structure has enabled us to leverage the ongoing, gradual global industrial recovery. We achieved these record results despite persistent raw material cost inflation and anemic construction markets in the developed economies of the world.”

Bunch added that PPG’s third quarter segment earnings grew by more than 35 percent versus the same period last year. “Higher industrial activity resulted in sizable gains in our Industrial Coatings and Commodity Chemicals segments, and in our fiber glass business, all of which are experiencing strong demand recovery from the recession.

“Also, our Performance Coatings and Optical and Specialty Materials segments delivered third quarter earnings records, once again growing by double-digit percentages. The Architectural Coatings – EMEA (Europe, Middle East and Africa) segment earnings fell slightly due primarily to negative currency conversion.”

He said that PPG’s overall sales volumes grew 6 percent over 2009 even with a decline in the company’s architectural coatings businesses serving the mature regions.

“The shift of our portfolio to focus on coatings and optical products has significantly reduced our capital intensity. As a result, we have additional cash for earnings growth opportunities and to return to shareholders. Year-to-date, we have returned nearly 80 percent of our cash from operations to shareholders in the form of dividends and share repurchases,” Bunch said. PPG raised its quarterly dividend to 55 cents per share on July 15, and it has spent about $275 million year-to-date to acquire 4.2 million shares of PPG stock at an average per-share price of approximately $65.

Looking forward, Bunch said, “While we anticipate continued gradual recovery in economic conditions, the fourth quarter is traditionally a slower sales quarter for most of our businesses due to seasonality. Our focus continues to be on operational excellence as we remain committed to cost management. We are also working diligently to offset higher raw material costs.”

He said that PPG is implementing price increases for many of its products, including several in the Commodity Chemicals segment.

Bunch concluded, “We are planning to use our strong balance sheet over the next several quarters to further accelerate earnings growth through ‘bolt-on’ acquisitions and continued, selective share repurchases. We delivered record results despite the fact that the sales in our businesses have yet to fully recover. This, combined with our continued organic growth prospects and strong financial flexibility, give me optimism about our future earnings potential.”

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