PPG reports record corporate results; Refinish has modest gains

PPG Industries reported fourth quarter 2012 net sales of $3.6 billion compared to $3.5 billion in the fourth quarter of 2011. Net income for the fourth quarter 2012 was $227 million compared to $216 million in the fourth quarter of 2011.

PPG's Performance Coatings segment, which includes automotive refinish, had sales for the quarter of $1.2 billion, up 1 percent versus the prior year. Segment sales benefited from continued strength in aerospace demand, high single-digit percentage growth in U.S. architectural coatings sales and modest organic sales gains in automotive refinish. Sales in the quarter were negatively impacted by further weakening in marine new-build activity and lower architectural coatings volumes in emerging regions.

Segment earnings grew 26 percent to $177 million. In addition to the earnings impact of the sales increase, the segment delivered lower costs through discretionary cost management and restructuring-related benefits, and while cost inflation continued, it was at lower rates than in prior periods of the year.

PPG Industries annual sales for 2012 were $15.2 billion, an increase of 2 percent versus 2011 sales of $14.9 billion. The company’s full year 2012 net income was $941 million, or $6.06 per diluted share, versus 2011 net income of $1.1 billion, or $6.87 per diluted share. The company’s full year tax rate on ongoing earnings was 25 percent in 2012 and 2011.

“Our record fourth quarter results capped off an exceptional year for the company, driven by excellent operating performance and several significant strategic actions that have accelerated the pace of our portfolio transformation,” said Charles E. Bunch, PPG chairman and CEO. “During the quarter, as we did during the first nine months, we grew our sales and earnings despite moderate overall economic conditions that varied by region and end- use market, and continued negative impacts from currency translation.

“In summary, 2012 was an excellent year for PPG and its shareholders. We achieved new adjusted-earnings-per-share records in each quarter and delivered higher full year earnings in each major region, including Europe, reflecting our strong operating execution,” Bunch said. “We continued our history of strong cash generation, delivering record full year cash from operations and ending the year with $2.4 billion of cash and short-term investments. We also raised our annual dividend payout for the 41st consecutive year, a legacy we are proud to continue.”

Looking ahead, Bunch said he anticipates economic trends will remain varied by region in 2013, with a solid growth bias remaining in North America, improving growth prospects in Asia and subdued activity levels in Europe.