PITTSBURGH — PPG Industries has reported record sales of $2.8 billion for the fourth quarter, surpassing fourth quarter 2005 record sales by 11 percent. Fourth quarter net income was $157 million, or 94 cents a share. Net income includes an aftertax charge of $3 million, or 2 cents a share, to reflect the net increase in the current value of the company’s obligation under its proposed asbestos settlement agreement reported in May 2002, which is subject to pending court proceedings.
That compares with fourth quarter 2005 net income of $113 million, or 68 cents a share. This included aftertax charges of $17 million, or 10 cents a share, for the impairment of certain assets in the company’s specialty chemicals business; $10 million, or 6 cents a share, for direct costs related to the impact of hurricanes Katrina and Rita; and $3 million, or 2 cents a share, to reflect the net increase in the value of the company’s obligation under its proposed asbestos settlement agreement. Sales were $2.5 billion.
For all of 2006, PPG recorded net income of $711 million, or $4.27 per share, including aftertax charges of $106 million, or 64 cents a share, for estimated legacy environmental remediation costs at sites in New Jersey and Louisiana; $26 million, or 15 cents a share, for legal settlements; $23 million, or 14 cents a share, for business restructuring; and $17 million, or 10 cents a share, to reflect the net increase in the current value of the company’s obligation under the proposed asbestos settlement agreement. Net income also includes aftertax earnings of $24 million, or 14 cents a share, for insurance recoveries. Sales for 2006 were $11.0 billion, a record for any year.
For all of 2005, PPG recorded net income of $596 million, or $3.49 per share, including aftertax charges of $128 million, or 74 cents a share, for legal settlements; $21 million, or 12 cents a share, for direct costs related to the impact of hurricanes Katrina and Rita; $17 million, or 10 cents a share, for the impairment of certain assets in the company’s specialty chemicals business; $12 million, or 7 cents a share, for debt refinancing; and $13 million, or 8 cents a share, to reflect the net increase in the value of the company’s obligation under its proposed asbestos settlement agreement. Net income also included aftertax earnings of $11 million, or 6 cents a share, for insurance recoveries. Sales for 2005 were $10.2 billion, a record at that time.
“In the fourth quarter, we are pleased to achieve year-over-year double-digit percentage growth in both sales and earnings per share, despite weakening in several U.S. end markets and related temporary facility shutdowns by customers,” said Charles Bunch, chairman and chief executive officer of PPG. “In addition to the strong sales and earnings growth in our coatings and optical products businesses, we also saw improvement in our glass results due to actions taken in several of these businesses.
“For the full year, we also delivered double-digit percentage sales increases and related earnings growth in both our coatings and optical products businesses. Despite a difficult fourth quarter, our chlor-alkali chemicals business had one of its best years on record. And, while sales in our glass business segment were flat, our earnings improved,” Bunch said. “These strong fourth quarter and full year financial results continue to validate our strategies and clearly illustrate that we are delivering global profitable growth.
“Looking forward, while we see some ongoing challenges entering 2007 due to continued softness in a few U.S. customer markets, we anticipate that solid global economic conditions will remain. At PPG, we expect to continue capitalizing on this environment with organic growth, especially in emerging regions. Also, our 2006 acquisitions will provide meaningful sales and earnings growth in 2007. Additionally, while we are pleased with recent trends, we continue to work very hard in several of our businesses that are underperforming. In 2007, we will aggressively explore all alternatives for these businesses with the ultimate goal of maximizing shareholder value. Finally, as evidenced in 2006, we remain committed to using our consistent track record of cash generation for the ongoing benefit of our shareholders.”
For more information about PPG, visit: http://www.ppg.com.
