Effective May 01, 2011, PPG Industries Inc. (PPG) will increase the prices and implement surcharges for its electro coat primer line of transportation coatings and related products driven by higher costs for raw materials such as epoxy resins and titanium dioxide.
The cost for raw materials increased due to the global demand, capacity constraints, outages and availability of feedstocks and intermediates.
In January 2011, PPG Industries reported net income (GAAP) of $205 million or $1.24 per share in the fourth quarter of 2010 compared with $142 million or 85 cents per share in the year-ago quarter.
The improvement in the results was attributed to the company’s expansion in high-growth emerging markets, successful cost reduction initiatives and gradual industrial recovery worldwide, partly offset by rising raw material costs and disappointing trends in the construction markets in the developed economies.
Looking ahead, the company anticipates the global economic recovery to strengthen, driving volume increase for PPG, which it expects to leverage into higher earnings through continued cost focus.
Strong fourth-quarter performance along with successful adoption of growth strategies and their meaningful implementation make us confident about the company. In addition, the macro economy and the concerned industry are also showing signs of recovery
PPG Industries faces stiff competition from privately held Akzo Nobel N.V., BASF Coatings AG and DuPont Performance Coatings.
Therefore, PPG Industries has a Zacks #3 Rank (Hold) in the short term and we hold a long-term Neutral recommendation on the stock.
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