PPG Reports Record Third Quarter Earnings

PPG Industries in Pittsburgh today reported net sales for the third quarter 2011 of $3.8 billion, an increase of 11 percent versus the prior year's third quarter. Net income for the quarter increased to $311 million, or $1.96 per diluted share. Third quarter 2010 net sales were $3.5 billion, and net income was $262 million, or $1.58 per diluted share.

Glass segment sales were $273 million, up $13 million, or 5 percent, compared with the prior year as a result of improved pricing and favorable foreign currency translation, which were offset slightly by lower volumes due to planned fiber glass production outages. Segment earnings were $23 million, a decrease of $9 million from the prior-year quarter primarily due to the lower volumes and higher maintenance costs.

"This is the fifth consecutive quarter in which we eclipsed our prior quarterly earnings record," says Charles E. Bunch, PPG chairman and chief executive officer. "This consistent improvement in performance, especially in light of today's economic backdrop, demonstrates the value of our management's aggressive focus on operations and the continuing benefit of the structural changes that we have made to the company the past few years, including lowering our cost base and expanding in emerging regions. In addition, these results reflect the continuing benefits of our disciplined deployment of our strong cash position."

Pricing on a corporate basis increased for the sixth consecutive quarter, Bunch says, as all 13 PPG businesses implemented higher pricing this quarter to further counter higher input costs. "PPG's overall volumes were flat year-over-year," he says. "Demand in most markets in North America was up modestly and fairly consistent with the prior quarter's growth rate. Continued volume gains in emerging regions such as Asia/Pacific and Latin America offset lower demand in Europe, which was driven principally by the company's consumer-oriented businesses."

PPG's year-to-date cash from operations is up more than 10 percent versus the prior year. "Dividends and share repurchases have totaled more than $900 million so far in 2011, providing evidence of our commitment to return cash to our shareholders," Bunch says. The company reported that it repurchased 3.25 million shares of stock in the third quarter, bringing the year-to-date total number of shares repurchased to 7.5 million.

"Looking ahead, we expect current macro and regional economic trends to continue, supported to date by October activity levels in many of our businesses," Bunch says. "In general, we anticipate normal seasonal fourth quarter patterns to occur. Raw material inflation rates are flattening, and we are in the process of implementing additional price increases in several businesses to counter the inflation we have absorbed. Our cash position remains strong, and we intend to continue to focus cash deployment on earnings growth initiatives. Finally, we are keeping a watchful eye on the global economy, and we are prepared to adapt to changing conditions."

PPG reported today that it ended the quarter with approximately $1.3 billion in cash and short-term investments.