Key Highlights

  • Consensus EPS of 2.12 compares with diluted EPS of 1.95 reported for the second quarter, against 1.98 a year earlier.
  • Consensus revenue of USD 4.28 billion compares with net sales of USD 4,495 million, up 7% from last year.
  • Income before income taxes was USD 569 million, a decrease of USD 29 million, with lower automotive refinish volumes cited.
  • Selling, general and administrative expense was USD 931 million against USD 872 million, and interest expense was USD 71 million.

PPG Industries (NYSE:PPG) reports third-quarter results on Tuesday, Oct. 27, after the market closes. Consensus stands at EPS of 2.12 on revenue of USD 4.28 billion, and the company has a market capitalization of USD 24.43 billion.

PPG Industries reports Performance Coatings and Industrial Coatings segments. In the second quarter, it reported net sales of USD 4,495 million against USD 4,195 million and net income of USD 437 million against USD 450 million.

Estimates Against the Last Reported Quarter

The EPS estimate of 2.12 is above the diluted EPS of 1.95 reported for the second quarter, which compared with 1.98 a year earlier, and the estimates table does not state whether it is adjusted. The revenue estimate of USD 4.28 billion is below the USD 4,495 million of net sales reported.

The filing says diluted EPS from continuing operations declined slightly while adjusted EPS increased slightly, as lower earnings were offset by lower adjusted weighted average shares from repurchases.

Sales and Earnings Drivers

Net sales rose approximately 7%, which the filing ties primarily to higher selling prices, higher sales volumes and favorable foreign currency translation. Cost of sales was USD 2,687 million against USD 2,432 million.

Income before income taxes was USD 569 million against USD 598 million. The filing says earnings growth in aerospace and Latin America architectural coatings was offset by lower sales volumes in automotive refinish coatings.

Segment Sales and Cost Lines

Performance Coatings sales totaled USD 1,619 million, with United States and Canada at USD 928 million against USD 923 million, EMEA at USD 378 million against USD 329 million, Asia Pacific at USD 283 million against USD 233 million and Latin America at USD 30 million against USD 27 million. Industrial Coatings sales totaled USD 1,778 million, with United States and Canada at USD 591 million against USD 572 million, EMEA at USD 494 million against USD 448 million, Asia Pacific at USD 482 million against USD 445 million and Latin America at USD 211 million against USD 200 million.

Selling, general and administrative expense was USD 931 million against USD 872 million, depreciation was USD 108 million against USD 102 million, and amortization was USD 26 million against USD 33 million. Research and development, net, was USD 107 million against USD 106 million.

Interest expense was USD 71 million against USD 62 million, and basic EPS was 1.96 against 1.98, while net income including noncontrolling interests was USD 440 million against USD 458 million. The estimates table lists a market capitalization of USD 24.43 billion.

Figures to Follow in the Release

Diluted EPS against 2.12 and revenue against USD 4.28 billion are the headline comparisons. Other markers are automotive refinish volumes, segment sales and selling, general and administrative expense against USD 931 million.