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
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.