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PPG Announces Third-Quarter Financials

Friday, October 20, 2017

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On Thursday morning (Oct. 19), Pittsburgh-based global coatings manufacturer PPG announced its third-quarter earnings report, noting a small increase in net sales over the same quarter in 2016.

The company reported a 3 percent increase, marking net sales at $3.8 billion—compared to $3.66 billion last year.

© iStock.com / JoeCollver

The company reported a 3 percent increase, marking net sales at $3.8 billion—compared to $3.66 billion last year.

PPG also shared that it is continuing its “commitment to spend $3.5 billion on acquisitions and share repurchases in combined 2017 and 2018, with more than $700 million spent to date.”

“We have achieved some operating margin recovery, despite continuing raw material cost inflation driven by a variety of supply-related factors, some of which are transitory," said Michael McGarry, PPG chairman and chief executive officer.

“We have continued to aggressively manage our costs, and have secured initial selling price increases with only a portion of these increases realized during the quarter. Also, while we still have more work to do to improve our overall organic growth rate, we are continuing to make measurable headway in several areas, including our Industrial Coatings segment which grew sales volumes by more than 3 percent year-over-year, and in our U.S. architectural coatings company-owned stores where same store sales growth was trending above 6 percent prior to the hurricanes.”

Earnings by Segment

The Industrial Coatings segment led the Q3 growth with net sales at $1.5 billion, up about 3 percent, or $49 million period over period. Sales volume also increased by more than 3 percent.

Automotive original equipment manufacturer coatings sales volumes also increased, by a low-single-digit percentage year-over-year, while aggregate industrial coatings and specialty coatings and materials sales volumes increased by a mid-single-digit percentage.

PPG

Protective and marine coatings sales volumes were flat year-over-year, and architectural coatings sales volumes were either flat or declined by a mid-single-digit percentage, depending on the region.

In the Performance Coatings segment, third-quarter net sales were approximately $2.3 billion, up $67 million, or 3 percent, versus the prior year. Sales volume declined, however, by 1 percent.

Protective and marine coatings sales volumes were flat year-over-year, and architectural coatings sales volumes were either flat or declined by a mid-single-digit percentage, depending on the region.

The company attributed much of the marginal decline to natural disasters, and added that it expects that influence to unfavorably impact the fourth-quarter diluted earnings-per-share by up to $.05.

“Looking ahead to the fourth quarter, we expect moderate global economic growth to continue. Given the after-effects from the natural disasters, we no longer expect any notable decline in the level of raw material cost inflation for the remainder of this year,” McGarry said. 

"We are continuing to work with our customers to address the inflationary environment and expect to realize additional selling price increases. Lastly, we continue to execute on our restructuring program and remain on track to deliver full-year savings of more than $45 million as we continue to manage all aspects toward margin recovery.”

All figures presented on Thursday classified the company’s former Glass Segment as discontinued operations.

   

Tagged categories: Business matters; Business operations; Earnings reports; Finance; NA; North America; PPG; Program/Project Management

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