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Letter to the Editor

PPG Reports On Second Quarter

PITTSBURGH -- PPG Industries has reported second quarter 2001 net income of $155 million, or 92 cents a share, on sales of $2.16 billion.

In the same quarter last year, net income was $205 million, or $1.17 a share, on record sales of $2.28 billion.

For the first six months of 2001, net income was $211 million or $1.25 a share, including a first-quarter pretax restructuring charge of $101 million. After-tax, the charge was $71 million or 42 cents a share. Excluding the charge, net income for the first half of 2001 was $282 million or $1.67 a share. Sales were $4.3 billion. First-half 2000 net income was $344 million, or $1.96 a share, on sales of $4.4 billion. Excluding a charge for the writeoff of an equity investment, net income for the first six months of 2000 was $379 million or $2.16 a share.

"The overall market weakness that is affecting industry is affecting our performance, too," said Raymond W. LeBoeuf, chairman and chief executive officer. "Our early recognition of the sluggish global economy, however, enabled us to accelerate actions to reduce costs and increase efficiency. This is one reason that, despite deteriorating economic conditions, the 21 percent decline in earnings per share in the second quarter was less than the first quarter's decline. The focus on cost savings not only helps our earnings in tough times like these -- but positions us to improve our performance as the economy recovers. Even in this difficult environment, our disciplined approach enabled us to satisfy the corporation's cash requirements and still reduce our debt by more than $150 million in the quarter."

Coatings sales were down from record highs in the second quarter of 2000, largely driven by lower volumes in automotive and industrial coatings. The earnings decline from lower volumes was partially offset by manufacturing efficiencies and reductions in overhead, primarily in automotive OEM coatings.

Glass sales were flat despite sharply lower demand for fiber glass used in printed wiring boards. Although strong manufacturing efficiencies were achieved throughout the glass segment, earnings fell on lower fiber glass volumes and higher natural gas costs.

Chemical sales and earnings were down, largely as a result of volume declines in commodity chemicals and higher energy costs.

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