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Second Quarter Delivers Solid Sales, Earnings for Major Coatings Companies

The fortunes of major coatings manufacturers continued to improve in the second quarter, building on the momentum of late 2003 and the first quarter of 2004. Sales and earnings benefited from strong economic growth rates, robust housing and construction activity and improved industrial-production levels.

Leading the second-quarter charge was PPG Industries Inc., which set a sales record for any quarter in the company's history at $2.43 billion. Coatings-segment sales also set a new high-water mark, at $1.35 billion. The company's net income rose 20%, while coatings-segment operating income was up 8.8%, also posting a record high at $223 million.

The Sherwin-Williams Co. reported solid second-quarter sales and earnings on the strength of robust volumes for architectural coatings and improving market conditions for industrial maintenance coatings and product finishes. Sherwin-Williams' second-quarter net income rose 14.8%, to $126.4 million, while sales posted a 9% increase, to $1.62 billion. The company's giant Paint Stores segment reported an 11% sales increase, to $1.04 billion, while operating profit rose 17.3%, to $143.8 million.

RPM Inc. reported record sales and earnings for the company's fourth quarter and fiscal year ended May 31, with sales rising 12%, to $2.3 billion for the year and net income surging 302%. For the company's fourth quarter ended May 31, net income was $53 million, compared to a net loss of $43.4 million for the same period a year earlier. Sales for the quarter rose 15.5%, to $680.878 million.

Other major industry players chimed in with impressive second-quarter results for coatings businesses:

Akzo Nobel - Coatings-segment operating income up 7% excluding one-time items, to 146 million euros ($182 million); coatings sales off 1%, to 1.397 billion euros ($1.739 billion).

DuPont Co.- Coatings & Color Technologies segment operating income down 43%, to $150 million including a $64 million second-quarter charge for employee-separation costs; segment sales up 10%, to $1.560 billion.

BASF AG - Performance Products operating income excluding one-time items up 50%, to 217 million euros ($262 million); segment sales up 6.2%, to 2.029 billion euros ($2.447 billion); sales up 3% for the Performance Products segment's Coatings division, to 520 million euros ($627 million).

ICI plc - Paints segment operating income up 6%, to £66 million ($120 million); sales off 2%, to £568 million ($1.03 billion).

Rohm and Haas Co.- Coatings-segment profit of $66 million compared to a $4 million net loss in the second quarter of 2003; Coatings sales up 14%, to $642 million.

Arch Chemicals Inc. - Wood Protection and Industrial Coatings segment operating income $10.7 million, up from $4.1 million in 2003; segment sales up 33%, to $95.5 million.

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