Black and red: paint companies post Q1 results

Painting a room is one of the most common projects around the home. So how are the Sherwin-Williams and PPG performing in a tough economy? The answer varies.

Cleveland, Ohio-based Sherwin Williams made $37.3 million in the first quarter ended March 31, down more than 50% from $77.9 million in the same quarter last year. Pittsburgh-based PPG posted a loss of $111 million.

Both companies had very similar concerns over reduced demand.

Sherwin-Williams lowered its sales expectations for the full year. The company now expects a consolidated net sales percentage decline in the mid to high single digits. 

For the quarter, Sherwin-Williams net sales were $1.55 billion, down 13% compared with $1.78 billion in last year's first quarter.

"Global paint demand in the architectural, commercial, industrial and marine markets remained soft as the economic downturn we have been experiencing continued and expanded internationally during the first quarter of the year," said Christopher Connor, chairman and CEO. "In spite of the continuing softness in the domestic new housing market, slow housing turnover and softness in DIY customer demand, our Paint Stores Group continues to remain focused on providing superior customer service and gaining business wherever possible."

Net sales in the Paint Stores Group of $898.4 million in the quarter were 12.9% lower than last year's first quarter. During the quarter, same-store sales decreased 12.7%. Paint Stores Group segment profit decreased to $56.6 million in the quarter from $83.3 million last year due primarily to lower sales volumes partially offset by the effect of price increases over the last twelve months and reductions in selling, general and administrative expenses.

The Paint Stores Group opened 12 new stores in the first quarter while closing 19 redundant stores.

Included in PPG's  loss of $111 million  was an after-tax charge of $141 million for business restructuring. Sales for the first quarter were $2.8 billion, a decline of 30% compared to the prior year`s first quarter.

"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 E. Bunch, PPG chairman and CEO. "The most significant drop-offs occurred in global automotive OEM and in many industrial markets. We quickly implemented broad actions, including business restructurings and general spending controls, which were successful in offsetting some of the earnings impact from the lower demand levels."

Last month, PPG launched a plan that includes the closure of a paint manufacturing operation at the company's Saultain, France, plant and 2,500 job cuts around the world.