By Angela Chen
PPG Industries Inc. said that its acquisitions spree lifted
sales in the December quarter, as it continues evaluating
international expansion in hopes of transforming itself into the
top global paint business.
In November, PPG completed its $2.3 billion deal for Mexico's
Consorcio Comex SA, one of the largest paint manufacturers in North
America. The Comex acquisition pushed sales of performance
coatings, one of the company's two key segments, up nearly 10% in
the most recently ended quarter.
Last month, the company said it has entered negotiations to
purchase Revocoat, a French company that supplies sealants for the
automotive industry. The automotive market is a growing focus for
PPG. PPG, whose brands include Glidden and Olympic, is now vying
with the Netherlands' Akzo Nobel to claim the No. 1 spot on the
global coatings market.
Though overall global economic activity remains modest, Chief
Executive Charles E. Bunch said the company had sales volume growth
in each major region in the last quarter, with major strength in
the industrial coatings segment. However, unfavorable currency cut
sales by about $130 million.
"As we enter 2015, we anticipate growth rates will remain mixed
by region, with North American and Asian economies continuing to
grow at rates generally consistent with 2014," he added. The
company expects that European growth will be mixed by country, but
remain subdued overall unless oil prices remain at their current
low levels. If so, European economies "stand to benefit
considerably, which may stimulate higher growth in that region,"
said Mr. Bunch.
For the December quarter, PPG reported a profit of $83 million,
or 61 cents a share, down from $254 million, or $1.80 a share, a
year earlier. Excluding debt-financing and acquisitions-related
charges and other items, earnings rose to $2.11 from $1.68.
Net sales grew 5.9% to $3.71 billion.
Analysts polled by Thomson Reuters expected per-share profit of
$1.99 and revenue of $3.63 billion.
Performance coatings segment sales rose 9.6% to $2.09 billion,
primarily due to the Comex acquisition. The segment includes PPG's
North American architectural coatings business, which posted a
sales increase in the low single digits.
Industrial coatings sales edged up 1.1% to $1.34 billion. This
was helped by an automotive-market sales increase in the high
single digits, though partially offset by unfavorable currency.
Shares of PPG, inactive premarket, have improved about 19% in
the past 12 months through Wednesday's close.
Write to Angela Chen at angela.chen@dowjones.com
Access Investor Kit for Akzo Nobel NV
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=NL0000009132
Access Investor Kit for Akzo Nobel NV
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0101993055
Access Investor Kit for PPG Industries, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US6935061076
Subscribe to WSJ: http://online.wsj.com?mod=djnwires