Earnings Labs

PPG Industries, Inc. (PPG)

Q2 2008 Earnings Call· Thu, Jul 17, 2008

$107.54

-2.51%

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Transcript

Vince Morales

Management

Good morning, this is Vince Morales, Vice President of Investor Relations for PPG Industries. Welcome to PPG’s second quarter 2008 financial commentary. The financial commentary is provided by PPG’s Senior Vice President and Chief Financial Officer, William Hernandez. These comments relate to the financial information released on Thursday, July 17, 2008. Visuals supporting this briefing may be accessed through the investor center on PPG’s website at www.PPG.com. As shown on slide 2, the following presentation contains forward looking statements reflecting the company's current view about future events and their potential effect on PPG's operating and financial performance. These statements involve risks and uncertainties that could affect the company's operations and financial results, and as discussed in PPG Industries filings with the SEC, may cause actual results to differ from such forward looking statements. This presentation also contains certain non-GAAP financial measures. Pursuant to the requirements of Regulation G, the company has provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures in the Appendix of the visuals supporting this briefing. Now let me introduce PPG’s Senior Vice President and CFO, William Hernandez.

William Hernandez

Management

Today I will review PPG’s second quarter 2008 performance and comment on various trends that are impacting our results. Let me quickly recap the quarter. First, let me state that we are very proud to deliver strong financial performance this quarter. We achieved double digit percentage growth in sales, segment earnings and adjusted earnings per share, despite a higher inflationary environment and overall slower economic conditions including severe recessions in US residential construction and US automotive production. We were able to deliver this performance due to the strength and diversity of our business portfolio. Some of the main contributors were our growth drivers of Aerospace, Optical, Protective and Marine Coatings and our coatings businesses in Asia, Latin America and Eastern Europe, which continued to grow at very high rates. Our commodity chemical business had yet another solid quarter. Also, across all our businesses, we achieved one of our largest selling price increases in the past several years. Many of our strategic actions over the past several years were to diversify our business and geographic sales mix. These actions had more complexity versus remaining or expanding predominantly in the United States and not exploring new end markets. But we were successful in executing and we are realizing the dividends today as indicated by the financial performance we posted this quarter. This includes our recent SigmaKalon acquisition which is currently tracking ahead of our 2008 financial targets. Also, earlier this month we signed an agreement to sell approximately 60% of our Automotive Glass and Services businesses and we expect the deal to close in the third quarter. Since the third quarter of 2007, this business had been classified in our financial statements as a discontinued operation because of our intent to sell the entire business. Because we are retaining 40% interest in…

Vince Morales

Management

This concludes the second quarter 2008 financial commentary, featuring comments by William Hernandez, Senior Vice President and Chief Financial Officer.