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PPG Industries – Strategy insights to investors

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PPG Industries, Inc.  (NYSE:PPG) is a producer and supplier of protective and decorative coatings, optical and speciality materials, commodity chemicals, and glass. It operates in six business segments: performance coatings; industrial coatings; architectural coatings-Europe, Middle East and Africa; optical and specialty materials; commodity chemicals and glass. Performance coatings, industrial coatings and architectural coatings- EMEA segments supply protective and decorative finishes for customers in a range of end use markets, including industrial equipment, appliances and packaging; factory finished aluminum extrusions, and steel and aluminum coils; marine and aircraft equipment; automotive original equipment; and other industrial and consumer products. Optical and specialty materials segment consist of the optical products and silicas businesses. Commodity chemicals segment produces basic chemicals. Glass segment produces flat glass and continuous-strand fiber glass.     

Charles E. Bunch, CEO said “In 2012, we plan to continue to pursue growth in key technology-driven businesses, notably aerospace, automotive refinish and optical, as well as in faster-growing emerging regions.” Bunch said that he anticipates further consolidation in the $92 billion global coatings industry, and that PPG plans to continue to evaluate growth opportunities. “Our outlook for global economic conditions in 2012 includes growth in global industrial activity, including increased global automotive OEM industry production, and we believe global growth rates in the coatings industry will outpace gross domestic product… We expect that lower natural gas costs will continue to be a benefit to PPG in 2012. We also anticipate a continued slow recovery in the developed regions in residential and non-residential construction markets, and that uncertainty in the European region will result in subpar growth there.” Regarding current business conditions, Bunch said that most PPG businesses are performing in line with normal, seasonal fourth-quarter trends. Commenting on PPG’s recent declaration of force majeure for certain optical products because of flooding in Thailand, Bunch said that it would likely have a negative impact of about 8 cents to 14 cents per share on fourth quarter 2011 earnings but that there would be “minimal carryover effect into 2012.” Bunch also said that the company’s Commodity Chemicals segment could experience a 20-40 percent decrease in Q4 2011 earnings sequentially over Q3 results, due in large part to “chlorine customer inventory management.”

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Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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