PITTSBURGH– PPG Industries has reported first quarter net income of $184 million, or $1.11 a share, including aftertax charges of $23 million, or 14 cents a share, for business restructuring; and $6 million, or 3 cents 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 $2.6 billion.
In the first quarter 2005, PPG reported net income of $95 million, or 55 cents a share, including aftertax charges of $91 million, or 52 cents a share, for a legal settlement; and $5 million, or 3 cents a share, to reflect the net increase in the value of the company’s obligation under its asbestos settlement agreement. Sales were $2.5 billion.
“For the 12th consecutive quarter we posted an all-time, quarterly sales record,” said Charles Bunch, chairman and chief executive officer. “Supporting this revenue growth were our coatings businesses, which posted an all-time first quarter record, and our optical business, which increased sales by 20 percent and set the all-time record for any quarter. These results continue to demonstrate the success of our growth strategies.
“More important, our earnings per share were easily an all-time first-quarter record, reflecting our company’s primary mission of generating profitable growth. Though energy and raw material costs are still high, we remain optimistic about overall economic prospects and our ability to continue delivering strong financial performance.”
Coatings sales increased $108 million, or 8 percent, as a result of higher volumes, especially in Asia, and improved selling prices across most businesses. These increases coupled with an increase in sales due to acquisitions were partially offset by the impact of weaker foreign currencies. Operating earnings were up $158 million due to the impact of an adverse legal settlement in 2005, and the benefits of the higher selling prices and volumes. These increases were partially offset by the negative impact of inflation, primarily raw material costs and the impact of business restructuring.
Glass sales increased $11 million, or 2 percent, because of higher volumes across all businesses and acquisition-related sales increases, which were partially offset by the impact of weaker foreign currencies. Operating earnings were down $9 million due to the impact of inflation, primarily higher energy costs. These decreases were partially offset by manufacturing efficiencies.
Chemical sales increased $26 million, or 4 percent, due to higher optical products volumes, higher selling prices for chlor-alkali products and increased sales relating to an acquisition in the optical business. These increases were partially offset by lower volumes for chlor-alkali products and the impact of weaker foreign currencies. Operating earnings were down $27 million due to the impact of higher inflation, principally higher energy and ethylene costs of $44 million; higher environmental charges; lower volume; and higher advertising expenses. These decreases were partially offset by the benefit of the higher selling prices discussed above.