US auto coatings demand helps drive PPG profits up 6.5% in Q2

19 July 2012 13:22  [Source: ICIS news]

LONDON (ICIS)--PPG's second-quarter net profit was 6.5% higher year on year at $362m (€297m) on strong industrial coatings sales volumes growth in the US but a mixed picture elsewhere, the coatings, chemicals and glass maker said on Thursday.

Group sales revenues were flat in the quarter at $3.96bn but industrial coatings sales were up by 2.2%.

PPG said its industrial coatings segment sales volumes grew by more than 20% in the US including strong automotive OEM (original equipment manufacturer) coatings performance, although regional growth in the segment was mixed. Industrial coatings segment earnings were up by 24.4% from the year earlier period.

PPG’s commodity chemical sales were down by 9.2%, but segment profits were flat.

PPG said on Thursday that it would merge its commodity chemicals business with Georgia Gulf in a $2.1bn deal to create North America’s third largest chlor-alkali producer.

PPG took $3m in after-tax charges on this transaction in the second quarter but said it expects additional separation costs in the second half of 2012.

"In the second quarter, PPG delivered the highest quarterly earnings per share in company history as a result of continued execution, strong cost discipline and effective cash deployment," PPG chairman and CEO Charles Bunch said. "These record earnings were achieved despite significantly weaker European and Latin American currency exchange rates and growth that varied by region and end-use market."

The company reported earnings per share of $2.34 in the quarter, from $2.12 in the second quarter of 2011.

PPG expects challenging business conditions in Europe in the second half and North America and Asia growth to “remain inconsistent by end-use market”, said Bunch.

($1 = €0.82)

By: Nigel Davis
+44 20 8652 3214

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