Glass Sales Down at PPG, CFO Says

by Penny Stacey

PPG Industries' senior vice president and chief financial officer (CFO) William H. Hernandez said that glass segment sales dropped by about 4 percent on lower volumes during the second quarter, down slightly versus a year ago, during the company's second-quarter investors' financial commentary webcast.

Hernandez noted that performance glazings were also down by 3 percent. "Similar to the first quarter, the decline was largely due to the absence of an energy surcharge," he said. "Last year, the energy surcharge, which is on a quarter lag versus natural gas pricing, contributed $5 million more than this year, as first-quarter 2007 natural gas costs were down compared with a year ago."

Overall, the company said it is focused on improving results for its glass segment. "Although the first quarter was positive, the year-over-year results this past quarter did not meet our expectations," Hernandez said. "We will remain focused on improving results in the coming quarters."

On the automotive side of the glass segment, OEM glass volumes dropped by 16 percent. The company attributes the drop to "production declines at several domestic U.S. automotive customers." Likewise, PPG said automotive replacement glass and service sales decreased just slightly during the quarter.

Despite the decreases found in the glass segment, PPG reported record sales overall for the second quarter-or any quarter in the company's history-of $3.2 billion. Second- quarter sales were up 12 percent from 2006. PPG's second-quarter net income was $249 million, or $1.50 per share. The net income includes an aftertax charge of $6 million, or 3 cents a share, to reflect the net increase in the current value of the company's obligation under its proposed asbestos settlement agreement reported in May 2002, which is subject to pending court proceedings.

As for the previously announced potential sale of PPG's auto glass business, representatives from PPG were not able to comment on this, but a press release issued by the company notes that "the company is progressing on its business portfolio transformation with tangles results within the next few months."

Penny Stacey is a contributing editor for USGNN.com.