PPG Industries (NYSE:PPG) today announced that it will report nonrecurring charges in the first quarter 2012 related to business restructuring, environmental remediation and acquisition-related expenses. As a result, the company expects first quarter 2012 earnings per diluted share in the range of 2 to 7 cents. Adjusted earnings per diluted share for the quarter, excluding the nonrecurring charges, are expected to be between $1.75 and $1.80. This compares with reported earnings per diluted share of $1.40 in the first quarter 2011. There were no nonrecurring charges in the first quarter 2011.
“Our expected first quarter operating results provide further evidence of the continuing strength and consistent earnings growth potential of our business portfolio,” said Charles E. Bunch, PPG chairman and CEO. “During the quarter, we saw the overall pace of business activity improve compared with the fourth quarter 2011. This trend was aided by modest customer restocking and normal seasonal factors, and lower natural gas costs in the United States are also contributing to our results.
“In general, business conditions during the quarter were strong in North America and solid in Asia and other emerging regions,” Bunch said. “PPG benefited from year-over-year growth in several end-use markets, including aerospace, optical, automotive OEM (original equipment manufacturer) and industrial. Also, our architectural coatings business in the United States benefited from early signs of a construction recovery and mild winter weather, but overall industry demand remained well below historical levels. Lastly, demand in Europe was muted, and we expect economic recovery to occur slowly in that region.”
For the first quarter, PPG will report an after-tax charge of approximately $164 million, or $1.06 per diluted share, related to business restructuring actions, the majority of which will occur in Europe. The pretax restructuring charge of $208 million includes cash costs of approximately $160 million and about $48 million related to the net write-off of certain assets and other non-cash items. Of the approximate $160 million of cash costs about 80 percent will be spent in 2012, with the remainder to be spent in 2013.