PPG Industries (NYSE:PPG) today reported net sales for the first quarter 2012 of $3.8 billion, an increase of 6 percent versus the prior year’s first quarter. Net income for the quarter was $13 million, or 8 cents per diluted share, including nonrecurring charges. Adjusted net income for the quarter, excluding the nonrecurring charges, was $279 million, or $1.81 per share. First quarter 2011 net sales were $3.5 billion, and net income was $228 million, or $1.40 per diluted share. First quarter 2012 results include after-tax charges of $163 million, or $1.06 per diluted share, for business restructuring, $99 million, or 64 cents per diluted share, for environmental remediation charges, and $4 million, or 3 cents per diluted share, for business acquisition-related costs. There were no nonrecurring charges in the first quarter 2011. A Regulation G Reconciliation of first quarter 2012 adjusted net income and earnings per diluted share to reported net income and earnings per diluted share is included below. “PPG’s earnings growth momentum continued during the first quarter, and we achieved a seventh consecutive quarter of record earnings with adjusted earnings per share up about 30 percent versus last year,” said Charles E. Bunch, PPG chairman and CEO. “We have delivered consistently strong earnings over nearly two years despite the prolonged, gradual recovery from the economic crisis and continued raw materials cost inflation. Our broad business portfolio and operating discipline have been critical factors in our record performance, and we still have further growth opportunities as demand in some of our larger end-use markets continues to recover. “In the quarter, we benefited from strengthening demand in the United States in most end-use markets and growth in emerging regions, which offset weaker European activity,” Bunch said. “In aggregate, our core coatings and Optical and Specialty Materials segments delivered nearly 25 percent year-over-year earnings growth, with each segment delivering fairly equal growth rates. Business results were strong in the aerospace, automotive OEM coatings, industrial coatings and optical products businesses, as well as in the architectural coatings business in the United States. In addition, the Commodity Chemicals segment matched its excellent 2011 performance.
Jefferies analysts note that recent construction spending data indicates a cycle rotation away from construction-exposed names and toward industrial- and durable goods-levered firms could be playing out.