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TheStreet Open House

PPG Reports Record Third Quarter Earnings Per Share

Stocks in this article: PPG

Architectural Coatings – EMEA (Europe, Middle East and Africa) segment sales for the quarter were $564 million, a decrease of $9 million, or 2 percent, versus the prior year. Currency translation negatively impacted sales by approximately 11 percent, while sales from the Dyrup acquisition completed in January 2012 increased sales 8 percent providing a partial offset. Volumes declined by low-single-digit percentages; however, the decline was less severe than in the previous quarter. Despite the reduced volumes, segment earnings grew by $3 million versus the prior year to reach $56 million, aided by restructuring cost benefits and an improved sales margin mix. On a year-to-date basis the Dyrup acquisition increased segment sales by 9 percent, but the Dyrup business traditionally experiences a sales decline in the fourth quarter that exceeds that of the overall segment, reflecting the seasonal nature of the products acquired with the business.

Optical and Specialty Materials third quarter segment sales were $282 million, down $29 million, or 9 percent, including a 6 percent volume decline and a negative impact from foreign currency translation. Segment volumes declined due to slower optical consumer growth and associated customer inventory destocking. In addition, further customer inventory management actions were initiated to avoid product obsolescence ahead of the early 2013-scheduled introduction of Generation VII Transitions lenses. Segment earnings declined by $17 million year-over-year to $76 million due to the lower volumes, which were partly offset by lower selling expenses.

Commodity Chemicals segment sales for the quarter were $437 million, down $8 million, or 2 percent, versus the prior year. Selling prices were lower year-over-year, stemming from chlorine price decreases realized earlier this year, and partly offset by caustic pricing, which has risen each quarter during the year. Segment earnings were $94 million, a decline of $10 million from the third quarter 2011. Volume gains were offset by a negative sales mix. Lower natural gas input costs and manufacturing cost improvements partly offset the sales impacts. In addition, a small casualty loss stemming from a warehouse fire negatively impacted earnings by $4 million.

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