PITTSBURGH - PPG Industries reported record fourth quarter 2013 net sales from continuing operations of $3.7 billion, up $459 million, or 14 percent, versus the prior year. Fourth quarter 2013 reported net income from continuing operations was $254 million, or $1.78 per diluted share. Fourth quarter 2013 adjusted net income from continuing operations was $258 million, or $1.81 per diluted share, which excludes $4 million, or 3 cents per diluted share, for acquisition-related costs. Fourth quarter 2012 reported net income and earnings per diluted share from continuing operations were $191 million and $1.23, respectively, and adjusted net income from continuing operations was $194 million, or $1.25 per diluted share, respectively, excluding $3 million, or 2 cents per diluted share, for acquisition-related costs.

“Our record fourth quarter financial performance caps off one of the most successful years in the company’s history, both financially and strategically,” said Charles E. Bunch, PPG Chairman and Chief Executive Officer. “With the 45 percent increase in earnings per share versus last year, we have now delivered 14 consecutive quarters of record adjusted earnings, illustrating the benefits of our strong coatings portfolio, broad global footprint, prudent cash deployment and measurable results from our strategic actions.

“We achieved record fourth quarter financial results, as higher earnings stemming from our continuing operating and cost discipline are now being coupled with a higher level of organic sales growth,” Bunch said. “We continued to outpace industry growth in aerospace and automotive OEM coatings. More broadly, we also benefited from stabilizing regional demand in Europe, as our year-over-year coatings volumes in that region were flat in the fourth quarter following nine consecutive quarters of decline.

Looking ahead, Bunch said, “We expect to realize benefits from modest global growth. Regionally, we expect growth to remain broadest in the U.S. economy, spanning several coatings end-use markets. Emerging-regions growth, while still uneven, is expected to continue at a solid pace for PPG, comparable to recent trends. In Europe, which represents about one-third of our sales, economies appear to be improving but remain fragile. In 2014, we anticipate measured growth in that region, and we expect to realize solid earnings leverage due to the actions we have taken the past two years to significantly reduce our regional cost structure.”

Bunch also said the company remained slightly ahead of schedule on achieving targeted acquisition-related cost synergies relating to the North American architectural coatings acquisition. He added that the restructuring program approved in the third quarter 2013 is focused primarily on achieving the remaining synergies, and those actions are now underway. As a result, the company expects incremental cost savings of between $75 million and $90 million in 2014.

Performance Coatings segment net sales for the quarter were $1.4 billion, up 25 percent. The increase was due primarily to acquired-business sales, partly offset by a 3 percent decline in segment volumes. Aerospace net sales growth continued, aided by ongoing industry growth and sales from acquired businesses. Automotive refinish net sales grew in all major regions, including continued emerging-region volume gains and a return to growth in Europe. Excluding the favorable acquisition impacts, architectural coatings sales results by distribution channel were similar to results in recent quarters, including company-owned stores growth of more than 10 percent and lower national retail channel sales due to a previously disclosed change in products sold to a large retail customer. Lower but stabilizing marine new-build activity remained a large negative impact to segment volumes. Overall, the segment experienced normal seasonal trends, although the size and seasonality of the acquired architectural business amplified the impact in comparison to prior years. Segment earnings of $179 million were up 1 percent as a result of the increased net-sales impacts, partly offset by higher growth-related expenses in aerospace and automotive refinish.

Industrial Coatings segment net sales for the quarter were $1.2 billion, increasing 10 percent, or $108 million, versus the prior year primarily due to strong volume improvement, with acquisition-related gains also contributing. Volumes in automotive original equipment manufacturer (OEM) coatings grew by more than 10 percent globally, outpacing a global industry growth rate of about 3 percent, with each major PPG region delivering similar growth rates. The industrial coatings business also grew volumes globally, led by North American gains, growth in Asia that remained varied by end-use market, and initial volume recovery in European demand that led to a flat year-over-year comparison for that region. Strong Asian packaging coatings growth was offset by lower European demand. Segment earnings for the quarter were $174 million, up 21 percent as a result of the higher volumes and continued cost management.

Architectural Coatings – EMEA (Europe, Middle East and Africa) segment net sales for the quarter were $466 million, up $1 million versus the prior-year quarter primarily due to favorable foreign currency translation. Fourth quarter volumes declined by 4 percent year over year, consistent with the previous quarter and a significant improvement versus the first half of 2013, when year-over-year volume declines averaged 10 percent. Despite the lower volumes, segment earnings of $22 million were $13 million higher than the previous year due to lower costs, including benefits from completed restructuring actions and ongoing discretionary cost management.

Optical and Specialty Materials segment net sales for the quarter were $309 million, up $37 million versus the prior year. Glass segment net sales were $264 million for the quarter, up $23 million year over year.

PPG’s 2013 annual net sales from continuing operations were $15.1 billion, an increase of 12 percent versus $13.5 billion the prior year. The company’s full-year 2013 reported net income from continuing operations was $1.0 billion, or $7.13 per diluted share, versus $726 million, or $4.69 per diluted share, in 2012. Full-year 2013 adjusted net income from continuing operations was $1.2 billion, or $8.28 per diluted share, versus $995 million, or $6.44 per diluted share, in 2012.