PPG reports third quarter 2009 results

Pittsburgh, USA, based PPG Industries (NYSE: PPG), a global supplier of paints, coatings, optical products, speciality materials, chemicals, glass and glass fibre, reports sales of US$3.2 billion for the third quarter (Q3) of 2009, down 24% on the 2008 third quarter. Net income for the 2009 quarter was $159 million.

The $1 billion third quarter sales decrease included a $229 million impact from a 2008 divestiture, and a $150 million impact from negative foreign currency translation.

PPG reports year-over-year sales volumes down by about $500 million, or 12%, with declines in most regions, except Asia Pacific.

Selling prices were down about $150 million from last year’s third quarter, mainly as a result of lower commodity chemicals pricing.

In the company's Glass business segment (which includes PPG Fiber Glass, a global supplier of glass fibre reinforcements for composites), sales were down $329 million from the prior year, largely as a result of the 2008 divestiture. Lower volumes because of reduced construction and general industrial demand, and lower sales prices, also contributed to lower sales.

The Glass segment recorded a loss of $6 million, a drop of $23 million due to the lower volumes and lower sales prices. These decreases were tempered by lower manufacturing and input costs.

According to Charles E. Bunch, PPG chairman and CEO, the company’s efforts to transform its business portfolio over the past several years were evident in the third quarter results. PPG’s combined coatings and Optical and Speciality Materials segments achieved 7% higher year-over-year earnings and collectively accounted for more than 95% of total segment earnings. 

“Additionally, we capitalised on our expanded geographic footprint and posted record earnings in the Asia/Pacific region due to stronger year-over-year performance in China," he says. "These improved results partially offset lower year-over-year earnings in our Glass segment and in our Commodity Chemicals segment, a business that experienced record sales and earnings levels last year."

Looking forward

“Looking ahead to the fourth quarter, we anticipate only modest improvement in the overall economy," Bunch concluded. "We expect growth in Asia to continue, and we anticipate that global automotive production will remain at least at the third quarter levels, if not higher. Currency translation, which had been a headwind for PPG all year thus far, will likely shift to a tailwind. What’s more, many of our businesses will exhibit normal, slower seasonal demand patterns."