Not even a record-setting second quarter overall was enough to mask PPG chairman and chief executive officer Charles E. Bunch’s frustration with his company’s lower-than-expected glass sales.
During this week’s release of second-quarter financial figures, the company revealed that glass sales totaled $269 million, down $4 million from a year thanks to declines in both fiberglass and flat glass. PPG’s glass setbacks were partly offset by higher flat glass pricing, the company says in its release. Segment earnings were $8 million, a decrease of $15 million from the prior-year quarter. Earnings were impacted by the lower sales, reduced equity and international licensing earnings and the negative impact of inflation, including higher transportation and natural gas unit costs, according to the company release.
“It was a disappointing quarter for both business units in glass for slightly different reasons,” says Bunch.
He attributes the lower-than-expected flat glass numbers to a “poor quarter from manufacturing supply chain performance,” as well as lower demand on the commercial construction side that is the biggest market for flat glass.
Bunch remains cautiously optimistic, however, that things will eventually rebound.
“I would expect in the third quarter, we are going to improve our operating performance,” Bunch says. “I expect the flat glass business to still be challenged, but not to the same level that they were in the second quarter.”
Overall, PPG reported a second-quarter net income from continuing operations of $341 million, or $2.35 per diluted share. Adjusted net income for the quarter was $356 million, or a record $2.45 per diluted share, excluding non-recurring acquisition-related charges of 10 cents per diluted share. In the second quarter of 2012, the company reported net income and earnings per diluted share from continuing operations were $297 million and $1.92 respectively. There were no nonrecurring charges in the prior-year quarter.
“Overall, we continue to face mixed economic conditions,” Bunch says, “and we were pleased to have delivered record results for our shareholders.”