PPG raises its earnings outlook midpoint as coating sales grow
PPG narrowed its annual adjusted earnings guidance and raised its midpoint after quarterly sales grew 7 per cent. Aerospace and Latin American architectural coatings contributed to growth. Industrial coatings increased prices and volumes, but elevated input costs weighed on its margin. Operating cash generation also improved over the first nine months.
Economics & Markets··Morning
Sales rise 7 per cent in the third quarter
PPG, the paint and coatings producer, announced third-quarter results on 27 October. Quarterly earnings and revenue exceeded consensus estimates.[1], [2]
Sales increased from 4.082 billion dollars a year earlier to 4.353 billion dollars, a rise of 7 per cent. Organic sales, excluding currency and changes in business scope, grew 5 per cent. Net income from continuing operations climbed from 444 million dollars to 473 million dollars. Adjusted earnings per share increased 6 per cent to 2.25 dollars.[1]
Aerospace coatings support growth as industrial costs stay high
Management highlighted aerospace coatings and Latin American architectural coatings as contributors to growth. Performance Coatings organic sales rose 8 per cent, with gains in both volume and pricing. Its adjusted margin expanded 2.2 percentage points to 24 per cent. Industrial Coatings increased prices 2 per cent and volumes 2 per cent, although elevated input costs reduced its adjusted margin from a year earlier.[1]
Annual earnings guidance narrows to 7.90–8.10 dollars
PPG set annual adjusted earnings guidance at 7.90 dollars to 8.10 dollars per share, raising the midpoint while narrowing the range. Cash generated from operating activities over the first nine months was approximately 1.2 billion dollars, around 100 million dollars above the prior year. Share repurchases totalled approximately 150 million dollars in the quarter and approximately 320 million dollars from the start of the year.[1]
