Automotive refinish coatings organic sales show mid-single-digit percentage growth.
PPG reported fourth quarter 2017 net sales of approximately $3.7 billion, up nearly 8 percent versus the prior year. Sales volumes increased by 3 percent year-over-year and selling prices improved sequentially for the third consecutive quarter, adding less than 1 percent to sales growth. Favorable foreign currency translation improved net sales by more than 3 percent, or about $115 million, and acquisitions-related sales, net of divestitures, added less than 1 percent to sales growth.
Fourth quarter 2017 reported net income from continuing operations was $184 million, or 72 cents per diluted share, including an unfavorable impact of 5 cents per diluted share stemming from the natural disasters that occurred in the third quarter. Adjusted net income from continuing operations was $304 million, or $1.19 per diluted share. Adjusted net income excludes net after-tax charges totaling $120 million, or 47 cents per diluted share. As new information becomes available, including issuance of interpretations by regulatory bodies, the company may update this estimate.
For the fourth quarter 2017, the effective tax rate was 49.7 percent and the adjusted effective tax rate was 24.3 percent. For the full year, the adjusted effective tax rate was 24.4 percent. With the enactment of the US tax cuts and Jobs Act legislation, the company’s global effective tax rate is expected to be in the range of 23-to-24 percent for the year 2018.
“In the fourth quarter, we delivered solid and balanced sales growth in each major region, and both reporting segments achieved at least 2 percent sales volume growth,” said Michael H. McGarry, PPG chairman and chief executive officer.
“Additionally, our aggregate selling prices improved for the third consecutive quarter as we made continued progress on our margin recovery efforts, despite higher than anticipated raw material inflation in the quarter driven by ongoing supply-related issues, including production curtailments from additional environmental enforcement in China.
“Our Performance Coatings segment delivered its highest sales volume growth of the year, growing more than 2 percent aided by continued above-market performance in automotive refinish coatings, strengthening aerospace growth and solid mid-single-digit percentage volume growth in our U.S. company-owned architectural coatings stores. Industrial Coatings maintained a mid-single-digit percentage sales volume growth rate, once again well outpacing global industrial production, led by our general industrial and packaging coatings businesses,” McGarry said. Automotive refinish coatings organic sales improved by a mid-single-digit percentage driven by market outperformance in the U.S. and Europe, and strong emerging region demand. Automotive original equipment manufacturer (OEM) coatings sales volumes increased by a low-single-digit percentage year-over-year, consistent with global automotive industry production rates.
Full-year 2017 reported net sales from continuing operations were approximately $14.8 billion, up more than 3 percent, versus the prior year, including favorable foreign currency translation of less than 1 percent, or approximately $55 million. Organic sales growth of 1.5 percent versus the prior year was supplemented by acquisition-related sales growth of more than 1 percent.
This article courtesy of Russell Thrall III, publisher CollisionWeek. Check out their website at: www.collisionweek.com.