PPG Industries Inc . ( PPG ) is all set to increase its liquid caustic soda prices by $45 per short ton in the United States and by CAN$50 per metric ton in Canada due to decrease in demand and production of chlorine.
Liquid caustic soda, also known as sodium hydroxide, is a by-product in the production of chlorine. Liquid caustic soda is used by the chemical industry for making aluminum and also in the paper and pulp industry,
In October 2011, PPG Industries posted net income of $311 million or $1.96 per share for the third quarter of 2011 compared with $262 million or $1.58 per share in the year-ago quarter. The results surpassed the Zacks Consensus Estimate by 3 cents.
Net sales for the quarter came in at $3.8 billion, up 11% from $3.5 billion in the third quarter of 2010. It was almost in line with the Zacks Consensus Estimate of $3.89 billion. The improvement was attributed to demand improvements, higher pricing in each of its coatings businesses, successful cost reduction initiatives and a gradual industrial recovery worldwide, partly offset by rising raw material costs.
During the quarter, the company announced its agreement to acquire Dyrup A/S.
PPG Industries had cash and cash equivalents worth $1.3 billion as of September 30, 2011 compared with $936 million as of September 30, 2010. Total debt was $3.61 billion as of September 30, 2011 compared with $3.06 billion as of September 30, 2010. Inventories at the end of the quarter amounted to $1.7 billion versus $1.6 billion as of September 30, 2010.
The strong third-quarter performance along with successful adoption of growth strategies and their meaningful implementation, instill confidence in the company. In addition, the macro economy and the concerned industry are also showing signs of recovery.
PPG Industries has a short-term Zacks #3 Rank ('Hold'). Currently, we hold a long-term Neutral recommendation on the stock.
PPG faces stiff competition from the DuPont Performance Coatings segment of EI DuPont de Nemours & Co. ( DD ) and BASF Coatings AG .