“Our first quarter results reflect continued deterioration in the global economy, resulting in lower demand in many of the end-use markets we serve,” said Charles Bunch, PPG chairman and CEO. “The most significant drop-offs occurred in global automotive OEM and in many industrial markets.
“March ended better than we initially anticipated, as activity steadied in several U.S. end-use markets,” Bunch continued. “Our Asia Pacific region performed well in both February and March, nearly matching our strong prior year demand levels in both months. And, in Europe, our architectural coatings EMEA segment, despite being down for the quarter in total, delivered flat year-over-year sales volumes in March.
“Looking ahead,” Bunch added, “we anticipate some seasonal demand growth in the second quarter, but expect activity levels to remain low in comparison with recent years.”
Performance coatings segment sales in the first quarter 2009 decreased $186 million, or 17%, versus the prior year’s quarter. Sales declined as a result of lower volumes, particularly in the company’s automotive refinish business and architectural coatings—Americas and Asia/Pacific business. Segment earnings decreased $31 million, as lower volumes and weaker foreign currencies were not fully offset by increased selling prices and tighter cost control.
Industrial coatings segment sales for the quarter decreased $414 million, or 39%, due primarily to lower volumes in the automotive OEM coatings and industrial coatings businesses, reflecting the continued severe declines in global demand.Segment earnings for the quarter were a loss of $16 million, a decrease of $111 million due primarily to the negative effects of lower volumes. These declines were partially offset by lower overhead and manufacturing costs.
The architectural coatings EMEA sales for the quarter decreased $127 million, or 24%, due primarily to weaker foreign currency and lower volumes. These declines were slightly offset by increased selling prices. Segment earnings decreased by $6 million as lower overhead costs partially offset the impact of lower sales volumes.