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PPG Reports Consistent Sales for 2019 Q3

Friday, October 18, 2019

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Global coatings company PPG (Pittsburgh) released its third-quarter 2019 earnings report on Thursday (Oct. 17), announcing net sales consistent with the prior year at $3.8 billion, noting that net sales in constant currencies were about 2% higher.

Third-quarter 2019 reported net income from continuing operations was $366 million, down from $368 million last year, while adjusted net income from continuing operations was $396 million, up from $353 million last year.

“We delivered strong adjusted earnings per share growth of 15% compared to the prior year quarter, as we continue to build momentum and remain focused on operating margin recovery,” said Michael H. McGarry, PPG chairman and chief executive officer.

© iStock.com / jfarleyphoto

Global coatings company PPG (Pittsburgh) released its third-quarter 2019 earnings report on Thursday (Oct. 17), announcing net sales consistent with the prior year at $3.8 billion, noting that net sales in constant currencies were about 2% higher.

“Strong execution against our cost-savings initiatives and our sixth consecutive quarter with selling price increases of at least 2% aided in our gross profit improvement, as we continue our efforts to offset the significant raw material cost inflation absorbed in the past few years.

“Our earnings growth came despite notable weakening in industrial production, which was broad—both geographically and by end-use market—and which more significantly impacted our general industrial and automotive OEM coatings businesses. Consistent with our recent quarterly trends, the aerospace coatings and protective and marine coatings businesses posted strong sales growth.”

Performance Coatings

The Performance Coatings segment third-quarter net sales were about $2.3 billion, 1% higher than the prior year with segment volumes remaining flat, according to the company.

Segment income for the third quarter was $380 million, up $49 million, or about 15%, year-over-year. Segment income benefited from higher selling prices, continued cost management and restructuring initiatives.

Within that segment, aerospace coatings sales volumes grew by a high-single-digit percentage in the quarter while net sales for automotive refinish coatings increased by a low-single-digit percentage.

Sales in the protective and marine coatings business increased by a mid-single-digit percentage, driven by strong marine coatings sales in Asia and Europe.

And year-over-year sales in architectural coatings Americas and Asia Pacific increased slightly, while in the U.S. and Canada, architectural coatings sales grew modestly, led by low-single-digit percentage year-over-year sales growth in the national DIY retail and independent dealer channels.

“We made excellent progress executing on our key initiatives, including $20 million of cost savings in the third quarter related to previously announced cost savings programs,” said McGarry.

© iStock.com / jetcityimage

Year-over-year sales in architectural coatings Americas and Asia Pacific increased slightly, while in the U.S. and Canada, architectural coatings sales grew modestly, led by low-single-digit percentage year-over-year sales growth in the national DIY retail and independent dealer channels.

“In addition, we completed the acquisition of Dexmet, a manufacturer of specialty materials for aerospace, automotive and industrial applications. We have completed four acquisitions with combined annual revenues of about $400 million that are benefiting our results this year. We continue to generate strong operating cash flow, with year-to-date cash generation improving by about $600 million in comparison to last year.

Industrial Coatings

The Industrial Coatings segment third-quarter net sales were $1.5 billion, down about $15 million, or 1%, versus the prior-year period. Segment income was about $205 million, up nearly $40 million, or about 22%, year-over-year.

Within the segment, automotive OEM coatings sales volumes decreased by a high-single-digit percentage year-over-year driven by lower global automotive industry production rates.

“As we look ahead to the fourth quarter, we anticipate global economic growth will remain soft impacting several end-use markets,” McGarry said.

“We currently expect 2019 full-year adjusted earnings per diluted share to be in the range of $6.17 to $6.27, which is comparable to our July guidance and includes fourth quarter year-over-year growth in constant currencies of about 15% at the mid-point. This guidance places our full-year 2019 adjusted earnings-per-share growth at the low-to-mid end of our previously communicated 7% to 10% range, excluding currency translation impacts. We continue to expect full-year sales growth of a low-single-digit percentage, excluding currency translation impacts.”

   

Tagged categories: Asia Pacific; Business matters; Business operations; Earnings reports; EMEA (Europe, Middle East and Africa); Finance; Good Technical Practice; Latin America; North America; PPG; Z-Continents

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