Operating income at Georgia Gulf's building products segment more than doubled from the same period a year ago to hit $14.3 million during the third quarter, the company announced Wednesday. The segment's net sales rose 18% to $262.5 million.
The company cited a rise in sales volume due to its February 2011 acquisition of Exterior Portfolio as the reason for the segment's jump in sales. The growth in operating income was driven by improved conversion costs, and lower selling, general, and administrative costs. Those numbers were partially offset by higher raw material costs and an unfavorable geographic and product sales mix.
Net sales in the company's chlorovinyl unit also increased 10% to $347.2 million, while operating income remained almost flat at $46.3 million. The rise in net sales and operating income was a result of higher caustic soda and vinyl resin sales prices compared with the same period a year ago.
Overall, net income at the Atlanta-based vinyl building products and chlorovinyl manufacturer grew 38% to reach $34.4 million behind a 23% increase in net sales to $929.6 million. Operating income was $54.2 million, a slight increase from the $53.2 million posted during 2010's third quarter.
"Longer term, we are confident that our integrated chemicals and building products business is well positioned to take advantage of the eventual recovery in the economy and housing, as well as the continued competitive advantage that comes from our access to low-cost, domestic natural gas," said Paul Carrico, president and CEO.
Carrico also said that the company's performance during the first three quarters of the year, including its $126.6 million in operating income, forced the company to revise its expected adjusted earnings before interest, taxes, depreciation, and amortization predictions to $245-255 million for 2011. The prediction is the lower half of what the company originally expected.