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Chemical, Paint Suppliers Release 4th Quarter Earnings

Fourth-quarter results from several leading paint suppliers and chemical manufacturers reflect impact of rising demand and cost reductions.

Dupont, PPG Industries, Sherwing-Williams, and Cytec Industries were among the leading suppliers of paints and special chemicals reporting positive fourth-quarter sales activity.

Following is a summary of 4th quarter performance:

DuPont

DuPont reported net income of $441 million, or 48 cents per share, in the three months ended Dec. 31 versus a loss of $629 million, or 70 cents per share, a year ago. Sales of $6.4 billion were up 10 percent versus prior year, led by sales growth greater than 20 percent for titanium dioxide, electronic materials, performance polymers and seed products. Earnings excluding significant items was $402 million, or 44 cents a share, versus a loss of $249 million or 28 cents per share in the prior year. The latest results topped analysts expectations for profit of 41 cents per share.

Global sales increased 10% in the fourth quarter to $6.4 billion, led by stronger demand for titanium dioxide, electronic materials, seed products and performance polymers. Demand for products such as titanium dioxide, a white pigment used in consumer goods, house paint and automotive coatings, often indicates whether the economy is growing or contracting, particularly in the short term.

Dupont’s volume grew 10%, with increases in all regions. Asia Pacific sales exceeded pre-recession levels with volume up 34% versus prior year, reflecting very strong demand in China, Japan, Korea and India. Meanwhile, raw material, energy and freight costs for the fourth-quarter were about 20% lower after adjusting for currency and volume. Dupont exceeded its full-year goal to deliver $1 billion of fixed cost reductions and productivity actions.


PPG

PPG Industries Inc., , which makes paint and coatings, said its fourth-quarter earnings doubled, driven by aggressive cost cuts and strong results in its coatings segment. PPG's quarterly earnings rose to $142 million, or 85 cents per share, from $71 million, or 43 cents per share, during the same period last year. The latest quarter's results include a one-time charge of a penny per share related to a legal settlement. Excluding special items, adjusted earnings amounted to 86 cents per share.

Segment leaders for the fourth quarter included the coatings division and the optical and specialty materials unit, which both gained from stronger foreign currencies. Sales volumes jumped in industrial coatings due to the gradual recovery in global demand, including higher automotive production.

CYTEC

Cytec Industries, Inc., (www.cytec.com), a global specialty chemicals and materials company, reported net earnings for the fourth quarter 2009 totalled $9.8 million or $0.20 per diluted share on net sales of $752 million. This was compared to a net loss of $350.7 million, or $7.39 per basic share on net sales of $698 million, for the fourth quarter of 2008.

The breakdown according to segment:

  • Coating Resins. Overall selling volumes were up by 21% versus the fourth quarter 2008, due to improved demand and restocking activities. Selling prices decreased by 12% in response to competitive pressures and lower raw material costs while the impact of changes in exchange rates increased sales by 7%.
  • Additive Technologies. Overall selling volumes were up 2% versus the fourth quarter 2008, but after adjusting for the exit of several commodity products and a product line divestiture earlier in 2009, comparable volumes were up 18%. Selling prices decreased by 3% and the impact of changes in exchange rates increased sales by 4%.
  • Process Separation. Selling volumes increased by 13% versus the fourth quarter 2008, primarily as a result of higher demand, principally from metal extractant customers. Selling prices decreased by 6% and the impact of changes in exchange rates increased sales by 3%.
  • Engineered Materials. Selling volumes decreased by 6% versus the fourth quarter 2008, driven primarily by build rate reductions in the business and regional jets sector. Selling prices were essentially flat and changes in exchange rates increased sales by 1%.
  • Building Block Chemicals. Selling volumes increased 38% versus the fourth quarter 2008, which is primarily related to improved demand levels. Selling prices decreased by 28% across all product lines due to lower raw material costs.

SHERWIN-WILLIAMS

Sherwin-Williams Co. said its net income in the fourth quarter was up 30%, to $65.3 million, from $50.2 million. Diluted per-share profits rose even more, increasing 38% to 58 cents a share from $0.42, because of fewer shares outstanding this year.

The higher earnings at Sherwin-Williams were achieved even though its sales in the quarter were down 6%, to $1.6 billion from $1.7 billion. In the latest fourth quarter, Sherwin-Williams saw its cost of goods sold, its selling, general and administrative expenses and its income taxes all decline from the fourth quarter of 2008. Asset impairment charges also were down from a year earlier.
 

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