Key Highlights

  • PPG reported third-quarter adjusted EPS of $2.25 on Tuesday, October 27, up 6% from $2.13 a year earlier.
  • Net sales rose 7% to $4,353 million, with price adding 3%, volume 2%, currency 1% and acquisitions 1%.
  • Adjusted EBITDA reached $793 million at an 18.2% margin, flat with last year.
  • Full-year 2026 adjusted EPS guidance was narrowed to $7.90 to $8.10 from $7.70 to $8.10.
  • Net debt stood at $5.2 billion, about $200 million lower than a year ago, after about $150 million of third-quarter buybacks.

PPG Earnings: Did the Third Quarter Beat and Lift the Outlook?

PPG Industries (NYSE:PPG) reported third-quarter results on Tuesday, October 27, with adjusted earnings per share of $2.25, up 6% from $2.13. That compares with an estimate of $2.12 as screened, a gap of 6.04%. GAAP diluted EPS from continuing operations was $2.12, up 8% from $1.96.

Net sales were $4,353 million, up 7% from $4,082 million, and organic sales grew 5%. The company narrowed its full-year 2026 adjusted EPS outlook to $7.90 to $8.10, which keeps the top end and raises the bottom from $7.70.

Coatings Segments: Why Did Industrial Coatings Margin Fall 260 Basis Points?

Performance Coatings led the quarter. Sales rose 10% to $1,554 million on 5% volume, 3% price and 2% from acquisitions, and segment EBITDA climbed 21% to $372 million, a 23.9% margin that was 220 basis points higher. Aerospace and protective and marine coatings led growth.

Global Architectural Coatings sales rose 4% to $1,055 million, with price up 4% and volume down 2%. Segment EBITDA rose 19% to $253 million and the margin widened 300 basis points to 24.0%, helped by European cost actions and Latin American growth.

Industrial Coatings was the soft spot. Sales rose 5% to $1,744 million on 2% volume and 2% price, but segment EBITDA fell 11% to $251 million and the margin slipped 260 basis points to 14.4%. Management said cost of goods inflation remains high there and that index-based pricing lags raw material costs.

Pricing and Cash Flow: What Offset Cost Inflation, and What Is the Fourth-Quarter Guide?

Pricing was the central rationale. Management said commercial actions fully offset cost of goods inflation, crediting pricing discipline, with price adding 3% to consolidated sales.

Volume added 2%, with share gains in packaging and automotive original equipment coatings, where volumes outpaced global vehicle production. Productivity programs and footprint optimization supported margins.

Consolidated adjusted EBITDA rose to $793 million from $742 million, holding the margin at 18.2%. The July guide called for a margin flat to down 100 basis points and low to mid single-digit organic growth; actual organic growth was 5%. The effective tax rate rose to 24.2% from 21.2%.

Operating cash flow was $1,158 million for nine months, about $100 million above last year, against capital spending of $464 million. PPG repurchased about $150 million of stock in the third quarter and $320 million year to date, and paid $482 million in dividends. Cash and short-term investments were $1.6 billion.

For the fourth quarter, management guided organic sales growth of low single digits and an adjusted EBITDA margin flat to up 100 basis points. Architectural and Performance Coatings are guided to margin expansion, while Industrial Coatings faces margin compression from the timing of index-based pricing.

What to Watch Next: Call Commentary and the Fourth-Quarter Pricing Lag

PPG holds its earnings call on Wednesday, October 28, at 8:00 a.m. ET, where investors will look for detail on how fast index-based pricing catches up in Industrial Coatings. The release listed tariffs only as a general forward-looking risk, so any call comment on cost pass-through would add to the picture.