Record Results for PPG’s Third Quarter
PITTSBURGH – PPG Industries reported third quarter 2013 net sales of $4 billion, up 17 percent versus the prior year. Third quarter 2013 reported net income from continuing operations was $220 million, or $1.52 per diluted share, and adjusted net income from continuing operations was $353 million, or $2.44 per diluted share. Third quarter 2012 reported net income and earnings per diluted share from continuing operations were $288 million and $1.86, respectively. There were no nonrecurring charges in the prior-year quarter.
Third quarter 2013 adjusted net income excludes after-tax charges of $73 million, or 50 cents per diluted share, for previously announced business restructuring; $56 million, or 39 cents per diluted share, due to an increase in a legacy environmental reserve; and $4 million, or three cents per diluted share, for acquisition-related expenses.
Third quarter 2013 reported and adjusted net income include lower pension expenses resulting from a reorganization of certain company pension plans, which occurred as a part of recently completed separation activities of the former commodity chemicals business. These changes resulted in a catch-up benefit recorded in the third quarter of about $9 million pretax, $6 million after tax, or a total of four cents per diluted share, which relates to the first half 2013 reporting periods. This benefit will recur, adding about $4 million to pretax income each quarter going forward.
“We continued to deliver record financial performance in the third quarter as positive impacts from our cash deployment and our strong operating focus were coupled with a broader improvement in market conditions,” said Charles E. Bunch, PPG Chairman and Chief Executive Officer. “Aerospace and automotive OEM coatings remained PPG’s most consistent growth drivers, with many other businesses contributing to the overall sales and earnings growth.”
Net sales for the company’s Performance Coatings segment were $1.6 billion for the quarter, up 34 percent, or $409 million, versus the prior year due primarily to the addition of sales from acquired businesses. Segment volumes, excluding acquisitions, declined two percent, as the impact of lower marine new-build industry demand in Asia offset growth in all other businesses.
Industrial Coatings segment net sales for the quarter were $1.2 billion, advancing about 10 percent, or $109 million, versus the prior year due to higher volumes and modest acquisition-related gains. Volumes in automotive original equipment manufacturer coatings grew by about 10 percent globally, with each major region, delivering growth on a comparable scale.
Architectural Coatings – EMEA (Europe, Middle East and Africa) segment net sales for the quarter were $571 million, up $7 million, or one percent, versus the prior year as lower volumes offset favorable foreign currency translation. For the third quarter, volumes declined by 4 percent year over year, which was a significant improvement versus the first half 2013 when volumes declined 10 percent year over year. Despite the lower volumes, segment earnings of $73 million represented growth of $17 million, or 30 percent, versus the prior year.
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