For the company's Coatings segment, second-quarter operating income excluding one-time items was 146 million euros ($182 million), a 7% increase from the second quarter of 2003. Coatings sales for the quarter declined 1%, to 1.397 billion euros ($1.739 billion). For the first six months of the year, Coatings operating income was 228 million euros, a 10% increase from the prior-year period. Coatings sales for the six-month period declined 2%, to 2.628 billion euros. Excluding the prior-year sales for the company's recently divested impregnated papers business, Coatings sales for the second quarter of this year rose 4% from 2003, while first-half sales rose 3%.

For the company's Coatings & Color Technologies segment, second-quarter operating income was $150 million, a 43% decline from the second quarter of 2003. Sales for the quarter rose 10%, to $1.560 billion. For the first six months of the year, Coatings & Color Technologies operating income was $303 million, a decline of 17% from the same period a year earlier. Sales for the six-month period rose 10.8%, to $2.977 billion. The segment incurred a $64 million second-quarter charge for employee-separation costs.

For the company's Paints segment, second-quarter operating income was £66 million ($120 million), a 6% increase from the second quarter of 2003. Sales for the quarter fell 2%, to £568 million ($1.03 billion). For the six-month period, operating profit was £100 million, a 12% increase from the year before. Sales for the six-month period rose 1%, to £1.067 billion.

ICI said second-quarter architectural-coatings sales were up 1% in Europe, 4% in North America, 26% in Asia, and 17% in Latin America. Packaging-coatings sales posted a sales gain of 5%, with sales particularly strong in Asia.

The company's Coatings segment also swung to a profit of $66 million from a $4 million loss in the second quarter of 2003. Coatings sales for the quarter rose 14%, to $642 million. For the first six months of the year, Coatings-segment earnings were $122 million, compared to $43 million for the prior-year period. Coatings sales for the six-month period rose 14%, to $1.208 billion.

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. For the year, the company's industrial and consumer operating segments recorded sales increases of 14% and 11% percent, respectively.

For the company's Wood Protection and Industrial Coatings segment, second-quarter operating income was $10.7 million, compared to $4.1 million for the second quarter of 2003. Segment sales for the quarter rose 33%, to $95.5 million. For the first six months of the year, Wood Protection and Industrial Coatings segment operating income was $14.1 million, compared to $6.3 million for the prior-year period. Sales rose 38%, to $181.6 million.

Outlook Viewed as ‘Positive';
Raw-Material Costs Remain a Worry

PPG Chairman and CEO Raymond W. LeBoeuf attributed sales and earnings gains for the quarter and six-month periods to "a growing economy" and "the consistent application of strategies that have generated profitable growth in our coatings segment, the continued success of our optical products and our relentless focus on reducing costs." LeBoeuf added, "Although we expect the overall economy to continue growing, there will not be consistency across all sectors of the economy. The overall expansion, however, continues."

PPG said second-quarter coatings-segment sales and income were driven by stronger volumes in the architectural, industrial, automotive OEM, aerospace and automotive-refinish businesses and the strengthening of foreign currencies. The company said increased volumes and improved manufacturing efficiencies "more than offset additional selling expenses in the architectural business, the impact of cost inflation and lower selling prices."

Valspar Chairman and CEO Richard M. Rompala said sales growth "was strong across all our product lines, particularly industrial and architectural coatings." He said, however, that earnings for the company's fourth quarter would be flat or show only a slight gain from the previous year due to escalating raw-material costs.

Rompala said the company anticipates increased earnings for the company's next fiscal year due to the recent acquisition of the forest-products business of Associated Chemists Inc. and the launch of a concrete-coatings strategic alliance with The Quikrete Cos.

Akzo Nobel said improved Coatings-segment earnings were the result of sales increases in Asia-Pacific and the United States and the company's restructuring actions.

"Decorative Coatings is under pressure from a hesitant business climate in Western Europe and Turkey," while the Marine & Protective Coatings, Industrial Finishes and Powder Coatings businesses continued to improve, the company said. "The performance of Car Refinishes is suffering from pressure on margins," and recently announced a worldwide restructuring program.

ICI Chief Executive John McAdam said market conditions "continued to be generally favorable in the second quarter," with results benefiting from strong sales and major restructuring actions announced in 2003. He said additional price increases are needed in the second half to compensate for the effect of rising raw-material costs.

Arch Chemicals Chairman, President and CEO Michael E. Campbell said the company's record second-quarter earnings were the result of stronger performances in several business and product areas, including biocides for marine antifouling paints and new wood-preservative materials. The strong gain in sales for the Wood Protection and Industrial Coatings segment were due primarily to increased volumes for Wolman and Tanalith wood-preservative products, which the company said offer alternatives to traditional CCA materials.

RPM President and CEO Frank C. Sullivan said the fourth-quarter results "capped off a strong year, with growth generated from a host of new and innovative products and services developed over the last several years and from the benefits of a number of acquired product lines."

Rohm and Haas Chairman and CEO Raj L. Gupta said gains in sales for the company's Coatings businesses were fueled in part by robust demand seen in the global Architectural and Functional Coatings sectors, particularly in North America and Asia-Pacific. In North America, growth was driven by strong housing and remodeling markets, while growth in Asia-Pacific occurred across most market segments, the company said.

Rohm and Haas said sales for its Powder Coatings and Automotive Coatings businesses rose due to "some improvement in industrial powder-coatings markets," favorable currency translations and some market-share gains.

Commenting on the outlook for the rest of the year, Gupta said the "overall economic outlook is positive," with a continued expansion in demand anticipated. But he said significantly higher raw-material, natural-gas and transportation costs will exert a drag on earnings growth.