PPG recently reported fourth quarter 2016 net sales of $3.5 billion, down more than 1% vs. the prior year. Reported net income in the fourth quarter of 2016 from continuing operations was $77 million. Net sales in the performance coatings segment in the fourth quarter were $1.98 billion, a decrease of $80 million, or less than 4%, vs. the prior year. Sales volumes dropped less than 1%, with acquisition-related sales providing a minimal benefit.
Automotive refinish sales grew organically by a low-single-digit percentage, led by increased demand in Europe. Aerospace sales in local currencies were reportedly consistent with the prior year, as industry demand growth remained modest. Protective and marine coatings sales volumes declined by a low-double-digit percentage year-over-year as growth in protective coatings was more than offset by further weakness in shipbuilding activity in Asia-Pacific.
Architectural coatings sales volumes in Europe, the Middle East, and Africa were reportedly in line with the prior year, with growth in Europe offset by lower demand in Africa. Architectural coatings sales volumes in the Americas and Asia-Pacific improved by low-single-digit percentages vs. the prior year. Performance coatings segment income for the fourth quarter of 2016 was $239 million, down about 4%, or $11 million, vs. the prior year. Net sales in the industrial coatings segment for the fourth quarter were $1.44 billion, up $66 million, or nearly 5%, compared to the previous year, despite unfavorable foreign currency translation of more than 2%, or approximately $30 million. Sales volumes grew by about 5%, led by strong emerging-region growth in all businesses.
Automotive original equipment manufacturer coatings sales volumes grew by a mid-single-digit percentage vs. the prior year, consistent with global industry growth rates. General industrial coatings and specialty coatings and materials aggregate sales volumes also grew by a mid-single-digit percentage, outpacing global industrial production growth for the fourth consecutive quarter.
Fourth quarter income in the industrial coatings segment was $236 million, down $4 million, or less than 2%, vs. the prior year. Segment income benefited from higher sales volumes and lower manufacturing costs. Acquisition-related income also contributed to higher segment income, but at an expected margin level that is currently below the segment’s average margin.
Full-year 2016 net sales from continuing operations were $14.8 billion, consistent with the prior year including an unfavorable foreign currency translation impact of nearly 3%, or approximately $400 million. Sales volume growth of 1% vs. the prior year was supplemented by acquisition-related sales growth of nearly 2%, net of sales divested with the European fiber glass business.
The company’s 2016 full-year reported net income from continuing operations was $564 million, vs. $1.34 billion in 2015. Full-year 2016 adjusted net income from continuing operations was $1.55 billion, compared to $1.49 billion in 2015, representing an adjusted-earnings-per-diluted-share increase of 7%.
“We delivered fourth quarter and full-year adjusted earnings-per-diluted-share growth despite modest and uneven global economic growth and the impact of significant unfavorable foreign currency translation,” said Michael H. McGarry, chairman and CEO. “We achieved these milestones due to improving sales volumes, continued aggressive cost management, and ongoing earnings-accretive focused cash deployment.
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