Favorable currency translations also helped boost the bottom lines of many companies, particularly U.S.-based manufacturers.
Industry giants DuPont Co., Sherwin-Williams, PPG, ICI, and BASF all reported solid first-quarter sales and profit gains and strong performances for coatings businesses compared to the first quarter of 2003. The Valspar Corp. also said sales and earnings rose sharply for the company's second quarter that ended April 30.
Sherwin-Williams reported first-quarter net income of $51.5 million, a 67% increase from the first quarter of 2003. Sales for the quarter rose 14.9%, to $1.320 billion, primarily due to continued strong domestic architectural-paint sales and improving sales and market conditions in the domestic industrial maintenance, product-finishes and automotive segments, the company said.
For the company's giant Paint Stores Segment, first-quarter operating profit was $52.5 million, a 75.4% increase from the same period a year earlier. Paint Stores Segment sales rose 12.2%, to $803.7 million. The company's second-biggest business, the Consumer Segment, reported operating profit of $49.2 million, a 25.9% increase from the year before; sales rose 19.2%, to $317.2 million.
Sherwin-Williams Chairman and CEO Christopher M. Connor said the company expects sales for 2004 to post increases in the "mid-single digits" from 2003, as continued strengthening occurs in the architectural and industrial maintenance and product-finishes markets.
Akzo Nobel reported first-quarter net income of 176 million euros, or approximately $210 million, a 7% increase from the first quarter of 2003. Sales for the quarter fell 5%, to 3.138 billion euros ($3.736 billion). For the company's Coatings segment, first-quarter operating income was 82 million euros, or approximately $97 million, a 12% increase from the prior-year period. Coatings sales fell 2%, to 1.231 billion euros ($1.465 billion). The company said coatings sales volumes posted increases in Asia Pacific and the United States, while total segment sales were adversely affected by negative currency translations.
DuPont Co. reported first-quarter net income of $668 million, a 25% increase from the first quarter of 2003. Sales for the quarter rose 7%, to $8.1 billion. For the company's Coatings & Color Technologies business, first-quarter pretax operating income excluding one-time items was $189 million, a 34% increase from the first quarter of 2003. Sales for the business rose 12%, to $1.417 billion.
In other first-quarter results:
Jürgen Hambrecht, chairman of the Board of Executive Directors for BASF, said the company anticipates further strengthening in demand as economic expansions continue. "Driven by the dynamically growing economies in the Far East - especially in China - and by solid growth in North America, we are seeing synchronized growth in the global economy for the first time in years," he said. Hambrecht added, however, that "Europe, and Germany especially, is sadly lagging behind."
Sherwin-Williams' Connor said the company would "continue launching new products, actively pursuing new customers, opening stores, enhancing the shopping experience in our stores, and increasing the productivity of our operations" in an effort to boost sales and income "in all operating segments of our business."
"For the first time in three years we at PPG are optimistic about the global economy," PPG Chairman and CEO Raymond W. LeBoeuf said at the company's annual shareholders meeting. LeBoeuf said the company is poised for strong sales and income growth as a result of actions taken by the company in response to economic slowdowns in recent years.
He said the first-quarter results "reflect the benefit of our strategic actions to grow our coatings segment in combination with strong volume gains and an unwavering focus on efficient operations, despite lower pricing."
PPG said coatings sales increases were driven by stronger volumes in the architectural, industrial, aerospace, automotive OEM, and automotive-refinish businesses and the strengthening of foreign currencies. Sales gains were partially offset by slightly lower prices in the automotive OEM business.
Valspar Chairman and CEO Richard M. Rompala said the company's second-quarter results "benefited from the recovery in the U.S. industrial economy, continuing strength in our architectural-coatings product line and the impact of strong foreign currencies." He said the company expects "good sales momentum for the balance of the year."
ICI Chief Executive John McAdam said improved economic conditions seen in late 2003 continued during the first quarter, particularly in the United States. Also contributing to the first-quarter results were initial benefits from a major restructuring program launched in 2003. He said the demand outlook remains "generally good," although higher raw-material costs remain a potential obstacle to earnings gains.