PPG Industries Reports a Strong Q3

PPG Industries announced their third quarterly financials last week. They reported a strong quarter, with their adjusted Earnings Per Share (EPS) up by 3% despite an unfavorable higher effective income tax rate. Their net income shot up by 10% Year on Year (YoY), and sales showed a minimal 1% YoY change. Their performance coating segment, too, reported a similar result with a slightly increased sales volume.

PPG Consolidated Financials:

•             Net sales – $4.575 billion; +1% YoY

•             Net income - $468 million; +10% YoY

•             EPS - $2.00; +12% YoY

•             Adjusted EPS - $2.13; +3% YoY

Company’s net debt was $5.2 billion in the last quarter, up $0.3 billion Q3 2023.

Performance by Segment:

Performance Coatings:

•             Net sales – $2.921 billion; +1% YoY

•             Net segment income - $513 million; +13% YoY

Performance coating segments net sales increased because of higher selling prices of some products. It was partially balanced by liquidating business and effects of foreign currencies. Overall, Performance Coatings segment sales saw a 2% growth YoY – even with a lower global industrial production. This growth also fuelled by an increased record demand in aerospace, refinish coatings and architectural coatings in American and Asia-Pacific regions.

Notably, PPG recently announced the sale of its US and Canadian business to American Industrial Partners (AIP) for $550 million. This sale has also resulted in the company’s segment growth.

Industrial Coatings:

•             Net sales – $1.654 billion; -6% YoY

•             Net segment income - $199 million; -19% YoY

PPG’s industrial coatings segment suffered in the last quarter owing to the weakened build rates in the automotive industry. They, however reported a strong sales growth in South Asian regions, specifically in India and China. 

PPG expects organic sales to be flat and adjusted EPS to be at the low end of the $8.15 to $8.30 range in the next quarter. They allege that their balance sheet remains strong, and will drive shareholder value further.