Volume 50, Issue 12 - December 2015

FinancialFlash

Third-Quarter Glass Segment Sales Drop Slightly at PPG Industries

Third-quarter 2015 net sales from continuing operations were down for PPG Industries, both company-wide and in its glass segment. The company reported $3.87 billion, versus the prior-year figure of $3.94 billion. In the glass segment, net sales were $278 million for the quarter, down $5 million, or 2 percent, year-over-year.

According to the report, improved pricing in both glass businesses (flat and fiber) was offset by the impact of unfavorable foreign currency translation, which affected net sales by about $10 million. Segment sales volumes improved by a low-single-digit percentage year-over-year, driven by growing North American fiberglass demand that was offset by the absence of sales stemming from the divestiture of a flat glass facility in 2014. Segment income was $32 million, down $1 million from the prior year, as favorable pricing was offset by facility-outage-related costs, higher year-over-year pension expense and $5 million of unfavorable foreign currency. In local currencies, segment income grew 12 percent year-over-year.

“We have continued to deliver strong year-over-year growth in adjusted earnings per share, with results up 14 percent,” says Michael H. McGarry, president and chief executive officer. “Our third-quarter performance was achieved despite the impact of unfavorable foreign currency translation, which was more than offset by the continued benefit of our acquisitions, including consistently strong performance of Comex, ongoing and aggressive cost-management actions and continued cash deployment.”

McGarry added, “Sales volumes declined by less than 1 percent year-over-year, reflecting overall moderation in global economic conditions during the quarter and transitory customer inventory management.”

He also pointed out that regionally, the company saw higher sales volumes in Europe, and that year-over-year sales volumes also grew in Asia, “with softness and customer destocking early in the quarter followed by demand improvement later in the quarter.”

McGarry added, “sales volumes in the U.S. and Canadian markets were lower year-over-year, primarily due to customer inventory management,” and that South American demand weakened compared to the previous quarter and year-over-year.

“We anticipate a resumption of volume growth in our fourth quarter supported by continued global economic expansion, the absence of customer destocking and the benefit of including Comex in our organic-growth figures following the acquisition’s anniversary,” McGarry said.

Glass Segment Information
(unaudited) ($ in millions)
  3 Months ended Sept. 30 3 Months ended Sept. 30
  2015 2014 2015 2014
Net Sales $278 $283 $824 $838
Income $32 $33 $99 $48


Glaston Continues to Show Growth

Through the first three quarters of 2015, Glaston Corp. has seen growth in net sales and improved profitability, according to the company’s interim report.

In the third quarter, from July-September, the company received $31.2 million in orders, with net sales totaling $37.9 million. From January-September, the company took in $91.9 million worth of orders and recorded $100.3 million (EUR 90.8 million) in net sales.

“The third quarter was good in terms of net sales growth,” says president and CEO Arto Metsanen. “Compared with the corresponding period of the previous year, net sales grew by 57 percent to EUR 34.3 million ($37.9 million).”

The company’s machines and services businesses both increased their net sales, with growth coming mainly from North America, where net sales increased by 60 percent compared with July-September 2014, and in the Europe, Middle East and Africa region, where net sales grew by 25 percent.

“The Asian market, too, showed signs of recovery,” says Metsanen. “Our profitability improved, and the comparable operating profit, excluding non-recurring items, was EUR 2.5 million ($2.8 million). Profitability was improved by increased net sales, although fixed costs relating to the pre-processing business will adversely affect the year-end result. In respect of these, corrective measures are under way.”




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