Group 1 - PPG's shares increased by up to 6.1% following its first-quarter earnings report and full-year guidance, indicating positive investor sentiment despite economic uncertainties [1] - Management maintained guidance for adjusted earnings per share (EPS) between $7.75 and $8.05, driven by improvements in the performance coatings segment [2] - Performance coatings saw a 6% increase in volumes, particularly in the aerospace sector and automotive refinish, suggesting areas of economic strength [3] Group 2 - Global architectural and industrial coatings experienced volume declines of 3% and 1%, respectively, attributed to a slowdown in project-related business and governmental spending in Mexico due to geopolitical uncertainties [4] - In industrial coatings, growth in packaging volumes was not sufficient to counterbalance the decline in the automotive OEM market, as automakers are reducing production in 2025 due to economic concerns [4] - CEO Tim Knavish noted that over 95% of PPG's purchases are locally sourced or tariff-free, indicating that the company's exposure to tariffs is limited, with end markets currently performing adequately [6]

Financial Performance - The company reported sales of $3.7 billion for Q1 2025, a decrease of 4% compared to Q1 2024, primarily due to unfavorable foreign currency translation and business divestitures [8][10] - The first quarter segment EBITDA margin was 19.4%, and adjusted earnings per diluted share were $1.72 [10] - The company repurchased approximately $400 million of its stock and maintained a strong balance sheet [10][20] Business Segment Performance - In the Global Architectural Coatings segment, net sales were significantly impacted by unfavorable foreign currency translation, decreasing sales by 7% [11] - The Performance Coatings segment saw a 9% increase in organic sales, with double-digit growth in Aerospace [13] - The Industrial Coatings segment experienced a decline in net sales due to foreign currency translation and divestiture impacts, with organic sales down less than 2% [16][19] Regional Market Performance - Organic sales growth in Asia was driven by strong performance in China, India, and Vietnam [8] - The U.S. achieved 4% organic sales growth after six quarters of declines, supported by share gains and improved industrial production [9] - European organic sales were down 1%, showing significant improvement compared to prior quarters [9] Company Strategy and Industry Competition - The company is focused on its enterprise growth strategy launched in 2023, optimizing its portfolio and investing in innovation [10] - The company is managing costs aggressively and maintaining a disciplined capital allocation strategy [10][21] - The company has a balanced global business portfolio, minimizing reliance on any single country or market [21] Management Commentary on Economic Environment and Future Outlook - Management expressed confidence in navigating the current macroeconomic environment, citing structural advantages and a strong balance sheet [20][22] - The company anticipates project spending in Mexico to resume as economic conditions stabilize [34] - Management reaffirmed full-year earnings per share guidance of $7.75 to $8.50 [27] Other Important Information - The company has seen stable customer order backlogs at $300 million, indicating strong demand for its technology-advantaged products [13] - The company is executing contingency plans for its supply chain and monitoring customer order patterns closely [24][25] Q&A Session Summary Question: How do you expect margins to trend in Q2 for Global Architectural? - Management expects some margin benefit from sequential volume improvement, with positive pricing in the segment [29] Question: How much was the COMEX business down in Q1? - Management noted a pause in project-related spending in Mexico but highlighted solid core retail sales [31] Question: What is happening in the Refinish industry? - Management indicated that the lumpiness in sales does not affect pricing ability, attributing it to the two-step distribution model [37] Question: Can you unpack the sales guidance for Global Architectural Coatings? - Management expects project pauses in Mexico to continue into Q2 but sees potential for improvement in Europe [46] Question: What are the expectations for Performance Coatings volume this year? - Management is confident in achieving higher growth due to strong performance across various business units [50] Question: What is the outlook for Europe? - Management noted stabilization in industrial production and better order patterns in Western Europe [56] Question: How is the company positioned regarding tariffs? - Management stated minimal impact from tariffs due to a localized sourcing strategy and flexibility in operations [60] Question: What is the capital allocation strategy moving forward? - Management emphasized a focus on organic growth while remaining open to M&A opportunities that fit their strategy [81]

Financial Data and Key Metrics Changes - The company reported sales of $3.7 billion for Q1 2025, a decrease of 4% compared to Q1 2024, primarily due to unfavorable foreign currency translation and business divestitures [7][9] - The first quarter segment EBITDA margin was 19.4%, and adjusted earnings per diluted share was $1.72 [9] - Approximately $400 million of stock was repurchased during the quarter, maintaining a strong balance sheet [9][20] Business Line Data and Key Metrics Changes - In the Global Architectural Coatings segment, net sales were significantly impacted by unfavorable foreign currency translation, decreasing sales by 7% [11] - Performance Coatings segment saw a 9% increase in organic sales, with double-digit growth in Aerospace [13] - Industrial Coatings segment net sales declined due to foreign currency translation and divestiture impacts, with organic sales down less than 2% [16][17] Market Data and Key Metrics Changes - Organic sales growth in Asia was driven by strong performance in China, India, and Vietnam [7] - The U.S. achieved 4% organic sales growth after six quarters of declines, while European organic sales were down 1%, showing improvement compared to prior quarters [8] - Latin America saw slight organic sales growth, tempered by geopolitical uncertainties [8] Company Strategy and Development Direction - The company is focused on executing its enterprise growth strategy launched in 2023, optimizing its portfolio, and investing in innovation [9][10] - PPG aims to navigate the current economic conditions by leveraging its diversified global business portfolio and flexible manufacturing processes [21][22] - The company is committed to driving shareholder value through disciplined capital allocation and share repurchases [20][86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate uncertainties due to its structural advantages and strong cash generation capabilities [22][24] - The company anticipates project spending in Mexico to resume as economic conditions stabilize, despite current pauses [32][33] - Management reaffirmed full-year earnings per share guidance of $7.75 to $8.50, reflecting confidence in operational momentum and share gains [26][68] Other Important Information - The company issued €900 million of debt at 3.25% during the quarter, with upcoming euro debt maturities [19] - Management highlighted the importance of monitoring customer order patterns and adjusting operations accordingly in response to macroeconomic changes [22][24] Q&A Session Summary Question: How do you expect margins to trend in Q2 for Global Architectural? - Management expects margin recovery driven by sequential volume improvement and positive pricing [28][29] Question: How much was the COMEX business down in Q1? - The business was impacted by a pause in project-related spending, but core retail sales remained solid [30][31] Question: What is happening in the Refinish industry? - The lumpiness in sales is due to the two-step distribution model, but pricing remains strong due to the value proposition offered [35][36] Question: Can you unpack the sales guidance for Global Architectural Coatings? - Management expects project pauses in Mexico to continue into Q2, but anticipates improvements in Europe [42][46] Question: What are the expectations for Performance Coatings volume this year? - Management is confident in achieving mid-single-digit growth due to strong performance across various business units [50][52] Question: What is the impact of tariffs on the company? - The company has minimal impact from tariffs due to its localized sourcing strategy and is prepared to adjust pricing as necessary [60][61] Question: What is the split between residential and commercial in the COMEX business? - The core business is mostly residential, with recent expansions into project business [115] Question: What is the updated full-year currency EPS headwind? - The company expects a $0.09 impact from currency in Q1, which will diminish in subsequent quarters [117]

Core Viewpoint - PPG Industries reported a decline in profit and revenues for the first quarter of 2025, with adjusted earnings per share surpassing estimates despite overall sales decreases attributed to unfavorable currency translations and business divestments [1][2]. Financial Performance - The company reported a profit of $396 million or $1.64 per share, down from $443 million or $1.71 per share in the same quarter last year [1]. - Adjusted earnings per share fell to $1.72 from $1.87 year-over-year, exceeding the Zacks Consensus Estimate of $1.62 [1]. - Revenues for the quarter were $3,684 million, a decrease of approximately 4% year-over-year, but above the Zacks Consensus Estimate of $3,655.9 million [2]. Segment Performance - The Global Architectural Coatings segment experienced an 11% decline in sales to $857 million, missing the estimate of $967.9 million due to adverse foreign currency translation and lower sales volumes [2]. - The Performance Coatings segment saw a 7% increase in sales to $1,265 million, surpassing the estimate of $1,199.3 million, driven by growth in aerospace coatings and traffic solutions [3]. - The Industrial Coatings segment's sales declined 8% year-over-year to $1,562 million, but exceeded the estimate of $1,556.8 million, impacted by foreign currency translation and divestment of the silicas products business [4]. Financial Position - At the end of the first quarter, PPG had cash and cash equivalents of $1,830 million, an increase of approximately 56.7% year-over-year [5]. - Long-term debt decreased by around 6.2% to $5,574 million compared to the prior-year quarter [5]. - The company repurchased shares worth roughly $400 million during the reported quarter [5]. Outlook - PPG reaffirmed its full-year 2025 adjusted earnings per share guidance of $7.75 to $8.05, supported by share gains and self-help efforts amid current global economic conditions [6]. Stock Performance - PPG's shares have declined by 19.5% over the past year, compared to a 3.3% decline in the industry [7]. Zacks Rank & Comparisons - PPG currently holds a Zacks Rank 3 (Hold), with better-ranked stocks in the basic materials sector including Hawkins, Inc. (Rank 1), SSR Mining Inc. (Rank 2), and Intrepid Potash, Inc. (Rank 2) [8].

Financial Highlights - First quarter net sales reached $3.7 billion, a 1% increase organically[5] - Adjusted EPS was $1.72[5] - Segment EBITDA margin stood at 19.4%[5] - Approximately $400 million was allocated for share repurchases[6] Segment Performance - Global Architectural Coatings net sales decreased to $857 million[14] - Performance Coatings net sales increased to $1.265 billion[19] - Industrial Coatings net sales decreased to $1.562 billion[24] Projections and Outlook - Second quarter organic sales are projected to be flat to a low-single-digit increase[35] - The company anticipates low-single-digit inflation in raw material and enacted tariff costs for the second quarter[35] - Full-year EPS guidance remains unchanged at $7.85 - $8.05[32] Balance Sheet and Cash Flow - Net debt as of March 31, 2025, was $5.4 billion[30] - Cash balance as of March 31, 2025, was $1.9 billion[30] - $550 million was deployed to shareholders through dividends and share repurchases in the first quarter[30]

Core Insights - PPG Industries reported a revenue of $3.68 billion for the quarter ended March 2025, reflecting a 14.5% decline year-over-year, while EPS decreased to $1.72 from $1.86 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate by 0.77%, and the EPS surpassed the consensus estimate by 6.17% [1] Financial Performance - Net Sales in Performance Coatings reached $1.27 billion, exceeding the average estimate of $1.20 billion, but showing a significant year-over-year decline of 51.6% [4] - Net Sales in Architectural Coatings were reported at $857 million, below the average estimate of $918.35 million [4] - Net Sales in Industrial Coatings amounted to $1.56 billion, slightly above the average estimate of $1.53 billion, with an 8% year-over-year decline [4] Segment Income - Segment Income for Performance Coatings was $274 million, slightly above the average estimate of $273.54 million [4] - Segment Income for Architectural Coatings was $118 million, below the average estimate of $142.24 million [4] - Segment Income for Industrial Coatings reached $215 million, exceeding the average estimate of $173.71 million [4] Stock Performance - PPG Industries' shares have returned -5.8% over the past month, compared to a -0.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - PPG Industries reported quarterly earnings of $1.72 per share, exceeding the Zacks Consensus Estimate of $1.62 per share, but down from $1.86 per share a year ago, indicating a 7.5% year-over-year decline in earnings [1][2] Financial Performance - The company achieved revenues of $3.68 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.77%, but down from $4.31 billion in the same quarter last year, reflecting a year-over-year revenue decline of approximately 14.6% [2] - Over the last four quarters, PPG Industries has exceeded consensus EPS estimates two times and topped consensus revenue estimates only once [2] Stock Performance - PPG Industries shares have decreased by about 13.8% since the beginning of the year, while the S&P 500 has declined by 6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.24 on revenues of $4.18 billion, and for the current fiscal year, it is $7.79 on revenues of $15.8 billion [7] - The outlook for the Chemical - Specialty industry, to which PPG Industries belongs, is currently in the bottom 40% of Zacks industries, which may negatively impact stock performance [8]

First Quarter 2025 Financial Highlights This section summarizes PPG's first quarter 2025 financial performance, including consolidated results, CEO commentary, and key financial metrics [Consolidated Results Overview](index=1&type=section&id=First%20Quarter%202025%20Consolidated%20Results) PPG reported a decrease in net sales, net income, and EPS for the first quarter of 2025 compared to the prior year, with adjusted figures also showing a decline | $ in millions, except EPS | 1Q 2025 | 1Q 2024 | YOY change | | :------------------------ | :------ | :------ | :--------- | | Net sales | $3,684 | $3,849 | (4)% | | Net income | $375 | $405 | (7)% | | Adjusted net income | $396 | $443 | (11)% | | EPS | $1.64 | $1.71 | (4)% | | Adjusted EPS | $1.72 | $1.87 | (8)% | [Chairman and CEO Commentary](index=1&type=section&id=Chairman%20and%20CEO%20Comments) CEO Tim Knavish highlighted positive organic sales growth driven by increased volumes and selling prices, particularly in the Performance Coatings segment and the U.S. The company is realizing benefits from its enterprise growth strategy, expecting $75 million in annual cost savings, and reaffirms its full-year EPS guidance - PPG is beginning to realize benefits from its enterprise growth strategy, delivering **positive organic sales growth** with increases in both sales volumes and selling prices[4](index=4&type=chunk) - The Performance Coatings segment delivered **9% organic sales growth**, with strong performance in automotive refinish, traffic solutions, aerospace, and protective and marine coatings[4](index=4&type=chunk) - The company expects to deliver **$75 million in annual savings** from self-help cost actions this year[7](index=7&type=chunk) - PPG is maintaining its full-year earnings per share guidance range of **$7.75 to $8.05**[8](index=8&type=chunk) [Key Financial and Operational Metrics](index=1&type=section&id=Key%20Financial%20and%20Operational%20Metrics%20Summary) For Q1 2025, net sales decreased 4% to $3.7 billion, while organic sales increased 1%. Reported EPS was $1.64 and adjusted EPS was $1.72. The company repurchased approximately $400 million in shares, and net debt increased to $5.4 billion | Metric | Value | YOY Change | | :---------------------- | :---------- | :--------- | | Net sales | $3.7 billion| (4)% | | Organic sales | +1% | | | Reported EPS | $1.64 | | | Adjusted EPS | $1.72 | | | Segment margin | 16.5% | | | Segment EBITDA margin | 19.4% | | | Share repurchases | ~$400 million| | | Net debt (quarter end) | $5.4 billion| +$340 million| [Additional Financial Information](index=2&type=section&id=Additional%20Financial%20Information) During the first quarter, PPG repurchased approximately $400 million in shares and issued €900 million of debt. The company's cash and short-term investments totaled $1.9 billion, with net debt at $5.4 billion, reflecting a $340 million increase from the prior year - Share repurchases in the first quarter totaled approximately **$400 million**[10](index=10&type=chunk) - In March, the company issued **€900 million of debt**[10](index=10&type=chunk) Cash and Debt Metrics | Metric | Q1 2025 | Q1 2024 | | :------------------------------ | :---------- | :---------- | | Cash and short-term investments | $1.9 billion| N/A | | Net debt | $5.4 billion| $5.06 billion (implied) | | Corporate expenses | $95 million | N/A | | Net interest expense | $13 million | N/A | | Reported effective tax rate | 24.3% | N/A | | Adjusted effective tax rate | 24.5% | N/A | Segment Performance Analysis This section analyzes the financial performance of PPG's individual business segments, detailing sales, income, and key drivers [Global Architectural Coatings Segment](index=2&type=section&id=Global%20Architectural%20Coatings%20Segment) Net sales for the Global Architectural Coatings segment decreased 11% year-over-year, primarily due to unfavorable foreign currency translation and lower sales volumes, partially offset by higher selling prices. Segment income and EBITDA saw significant declines Global Architectural Coatings Financials | $ in millions | 1Q 2025 | 1Q 2024 | YOY change | | :------------------ | :------ | :------ | :--------- | | Net sales | $857 | $966 | (11)% | | Sales volumes | | | (3)% | | Selling prices | | | +1% | | Foreign currency | | | (7)% | | Divestitures | | | (2)% | | Segment income | $118 | $166 | (29)% | | Segment income % | 13.8% | 17.2% | | | Segment EBITDA | $144 | $192 | (25)% | | Segment EBITDA % | 16.8% | 19.9% | | - Organic sales for architectural coatings EMEA were **flat year over year**, with increased organic sales in Central Europe and the Nordic region offset by Western Europe[12](index=12&type=chunk) - Organic sales for architectural coatings Latin America and Asia Pacific declined by a **mid-single-digit percentage**[13](index=13&type=chunk) [Performance Coatings Segment](index=3&type=section&id=Performance%20Coatings%20Segment) The Performance Coatings segment achieved 9% organic sales growth, with net sales increasing 7% to $1,265 million. This growth was driven by strong sales volumes and higher selling prices, leading to an 8% increase in Segment EBITDA and an improved EBITDA margin Performance Coatings Financials | $ in millions | 1Q 2025 | 1Q 2024 | YOY change | | :------------------ | :------ | :------ | :--------- | | Net sales | $1,265 | $1,184 | +7% | | Sales volumes | | | +6% | | Selling prices | | | +3% | | Foreign currency | | | (1)% | | Divestitures & other| | | (1)% | | Segment income | $274 | $251 | +9% | | Segment income % | 21.7% | 21.2% | | | Segment EBITDA | $307 | $285 | +8% | | Segment EBITDA % | 24.3% | 24.1% | | - The Performance Coatings segment delivered **9% organic sales growth**, partially offset by unfavorable foreign currency translation and divestitures[15](index=15&type=chunk) - Sales volumes increased **6% year over year**, led by aerospace coatings (record sales, double-digit organic growth), protective and marine coatings (double-digit organic growth), and traffic solutions[16](index=16&type=chunk) [Industrial Coatings Segment](index=4&type=section&id=Industrial%20Coatings%20Segment) Net sales for the Industrial Coatings segment declined 8%, primarily due to foreign currency translation and the divestiture of the silicas business. Selling prices decreased due to index-based contracts, and sales volumes were down due to lower automotive industry production, despite some strength in other subsegments Industrial Coatings Financials | $ in millions | 1Q 2025 | 1Q 2024 | YOY change | | :------------------ | :------ | :------ | :--------- | | Net sales | $1,562 | $1,699 | (8)% | | Sales volumes | | | (1)% | | Selling prices | | | (1)% | | Foreign currency | | | (2)% | | Divestitures | | | (4)% | | Segment income | $215 | $249 | (14)% | | Segment income % | 13.8% | 14.7% | | | Segment EBITDA | $263 | $301 | (13)% | | Segment EBITDA % | 16.8% | 17.7% | | - Automotive OEM coatings organic sales decreased by a **mid-single-digit percentage** due to lower U.S. and European industry build rates, partially offset by growth in China and Latin America[19](index=19&type=chunk) - Packaging coatings organic sales increased by a **low single-digit percentage** year over year driven by share gains[19](index=19&type=chunk) Outlook and Company Information This section provides PPG's financial outlook, a company profile, and important disclaimers regarding forward-looking statements [Outlook](index=4&type=section&id=Outlook) PPG reaffirms its adjusted earnings per share guidance for the full-year 2025, citing momentum from share gains and self-help actions, while also considering global economic conditions and mixed demand - The company reaffirms its adjusted earnings per share guidance of **$7.75 to $8.05** for the full-year 2025[21](index=21&type=chunk) [Company Profile](index=5&type=section&id=PPG%3A%20WE%20PROTECT%20AND%20BEAUTIFY%20THE%20WORLD%C2%AE) PPG is a global leader in paints, coatings, and specialty materials, operating in over 70 countries and serving diverse markets including construction, consumer products, industrial, and transportation. The company reported net sales of $15.8 billion in 2024 - PPG develops and delivers paints, coatings, and specialty materials, trusted by customers for over 140 years[24](index=24&type=chunk) - The company operates and innovates in **more than 70 countries**[24](index=24&type=chunk) - PPG reported net sales of **$15.8 billion in 2024**[24](index=24&type=chunk) [Additional Information & Forward-Looking Statements](index=5&type=section&id=Additional%20Information%20%26%20Forward-Looking%20Statements) This section provides details for accessing PPG's Q1 2025 financial performance commentary and conference call. It also includes a standard disclaimer regarding forward-looking statements, highlighting various risks and uncertainties that could impact future results - PPG will provide detailed commentary and hold a conference call to review its first quarter 2025 financial performance[26](index=26&type=chunk) - Forward-looking statements involve risks and uncertainties that may affect PPG's operations, as discussed in SEC filings[27](index=27&type=chunk) - Factors that could cause actual results to differ materially include global economic conditions, raw material costs, competition, and foreign exchange rates[27](index=27&type=chunk) Non-GAAP Reconciliations This section provides reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures, offering additional insights [Regulation G Reconciliation](index=6&type=section&id=Regulation%20G%20Reconciliation) PPG provides non-GAAP financial measures such as adjusted net income, adjusted EPS, and segment EBITDA to offer insights into ongoing performance by excluding items not expected to recur or not attributable to primary operations. These measures are not substitutes for GAAP figures - PPG discloses non-GAAP measures like adjusted net income, EPS, and segment EBITDA to enhance investors' understanding of ongoing performance[29](index=29&type=chunk) - These non-GAAP measures exclude the impact of items that are not reasonably expected to recur quarterly or are not attributable to primary operations[29](index=29&type=chunk) Reconciliation of Reported to Adjusted Net Income and EPS (Continuing Operations) | | First Quarter 2025 | First Quarter 2024 | | :------------------------------------------------ | :------- | :------- | | Reported net income from continuing operations | $375 | $405 | | Acquisition-related amortization expense | 24 | 26 | | Business restructuring-related costs, net | 7 | 8 | | Portfolio optimization | (6) | 4 | | Insurance recovery | (4) | — | | Adjusted net income from continuing operations | $396 | $443 | Reconciliation of Effective Tax Rate (Continuing Operations) | | First Quarter 2025 | First Quarter 2024 | | :------------------------------------------------ | :------- | :------- | | Effective tax rate, continuing operations | 24.3 % | 23.6 % | | Acquisition-related amortization expense | 24.4 % | 24.6 % | | Business restructuring-related costs, net | 19.7 % | 27.4 % | | Portfolio optimization | N/A | 24.2 % | | Insurance recovery | 24.3 % | — % | | Adjusted effective tax rate, continuing operations| 24.5 % | 23.9 % | Segment EBITDA Reconciliation | | First Quarter 2025 | First Quarter 2024 | | :-------------------------- | :------- | :------- | | Global Architectural Coatings | | | | Net sales | $857 | $966 | | Segment income | $118 | $166 | | Segment EBITDA | $144 | $192 | | Segment EBITDA % | 16.8 % | 19.9 % | | Performance Coatings | | | | Net sales | $1,265 | $1,184 | | Segment income | $274 | $251 | | Segment EBITDA | $307 | $285 | | Segment EBITDA % | 24.3 % | 24.1 % | | Industrial Coatings | | | | Net sales | $1,562 | $1,699 | | Segment income | $215 | $249 | | Segment EBITDA | $263 | $301 | | Segment EBITDA % | 16.8 % | 17.7 % | | Total Segment EBITDA | | | | Net sales | $3,684 | $3,849 | | Segment income | $607 | $666 | | Segment EBITDA | $714 | $778 | | Segment EBITDA % | 19.4 % | 20.2 % | Condensed Consolidated Financial Statements (Unaudited) This section presents PPG's unaudited condensed consolidated financial statements, including income, cash flows, and balance sheet highlights [Condensed Consolidated Statement of Income](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20INCOME%20%28unaudited%29) The unaudited condensed consolidated statement of income shows a decrease in net sales and income from continuing operations for Q1 2025 compared to Q1 2024, with diluted EPS from continuing operations at $1.64 Condensed Consolidated Statement of Income | (All amounts in millions except per-share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net sales | $3,684 | $3,849 | | Cost of sales, exclusive of depreciation and amortization | 2,142 | 2,205 | | Selling, general and administrative | 838 | 850 | | Depreciation | 89 | 95 | | Amortization | 32 | 35 | | Research and development, net | 102 | 107 | | Interest expense | 56 | 55 | | Interest income | (43) | (42) | | Other (income)/charges, net | (34) | 2 | | Income before income taxes | $502 | $542 | | Income tax expense | 122 | 128 | | Income from continuing operations | $380 | $414 | | Loss from discontinued operations, net of tax | (2) | (5) | | Net income attributable to controlling and noncontrolling interests | $378 | $409 | | Net income attributable to noncontrolling interests | (5) | (9) | | Net income (attributable to PPG) | $373 | $400 | | Earnings per common share (attributable to PPG) - assuming dilution | | | | Income from continuing operations, net of tax | $1.64 | $1.71 | | Loss from discontinued operations, net of tax | (0.01) | (0.02) | | Net income (attributable to PPG) | $1.63 | $1.69 | [Condensed Consolidated Statement of Cash Flows Highlights](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS%20HIGHLIGHTS%20%28unaudited%29) The condensed consolidated statement of cash flows highlights for Q1 2025 show cash used for operating activities of $18 million, capital expenditures of $209 million, and significant share repurchases totaling $394 million Condensed Consolidated Statement of Cash Flows Highlights | ($ in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Cash used for operating activities | ($18) | ($60) | | Capital expenditures | $209 | $252 | | Dividends paid on PPG common stock | $154 | $153 | | Purchase of treasury stock | $394 | $149 | [Condensed Consolidated Balance Sheet Highlights](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEET%20HIGHLIGHTS%20%28unaudited%29) As of March 31, 2025, PPG reported total current assets of $7,901 million and total current liabilities of $5,837 million. Cash and cash equivalents significantly increased to $1,830 million from $1,168 million a year prior, while long-term debt stood at $5,574 million Condensed Consolidated Balance Sheet Highlights | ($ in millions) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :---------------------------------------- | :------------- | :---------------- | :------------- | | Cash and cash equivalents | $1,830 | $1,270 | $1,168 | | Short-term investments | 63 | 88 | 54 | | Receivables, net | 3,429 | 2,985 | 3,233 | | Inventories | 2,115 | 1,846 | 2,100 | | Other current assets | 464 | 368 | 1,116 | | Total current assets | $7,901 | $6,557 | $7,671 | | Short-term debt and current portion of long-term debt | $1,688 | $939 | $311 | | Accounts payable and accrued liabilities | 3,885 | 3,731 | 4,004 | | Current portion of operating lease liabilities | 134 | 126 | 125 | | Restructuring reserves | 130 | 128 | 86 | | Other current liabilities | — | 90 | 417 | | Total current liabilities | $5,837 | $5,014 | $4,943 | | Long-term debt | $5,574 | $4,876 | $5,940 | [Operating Metrics](index=10&type=section&id=PPG%20OPERATING%20METRICS%20%28unaudited%29) PPG's operating working capital increased to $2,843 million as of March 31, 2025, representing 19.3% of annualized quarter sales, up from 17.3% in the prior year PPG Operating Metrics | ($ in millions) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :------------------------------ | :------------- | :---------------- | :------------- | | Operating Working Capital | $2,843 | $2,331 | $2,668 | | As a percent of quarter sales, annualized | 19.3 % | 15.6 % | 17.3 % | [Consolidated Business Segment Information](index=11&type=section&id=CONSOLIDATED%20BUSINESS%20SEGMENT%20INFORMATION%20%28unaudited%29) This section provides a detailed breakdown of net sales and segment income across PPG's three primary business segments: Global Architectural Coatings, Performance Coatings, and Industrial Coatings, along with unallocated corporate items Consolidated Business Segment Information | ($ in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net sales | | | | Global Architectural Coatings | $857 | $966 | | Performance Coatings | 1,265 | 1,184 | | Industrial Coatings | 1,562 | 1,699 | | Total | $3,684 | $3,849 | | Segment income | | | | Global Architectural Coatings | $118 | $166 | | Performance Coatings | 274 | 251 | | Industrial Coatings | 215 | 249 | | Total | $607 | $666 | | Items not allocated to segments | | | | Corporate / non-segment unallocated, exclusive of depreciation and amortization | (81) | (76) | | Corporate / non-segment unallocated depreciation and amortization | (14) | (18) | | Interest expense, net of interest income | (13) | (13) | | Business restructuring-related costs, net | (9) | (11) | | Portfolio optimization | 6 | (6) | | Insurance recovery | 6 | — | | Income before income taxes | $502 | $542 |

Core Viewpoint - PPG Industries is expected to report its first-quarter 2025 results on April 29, with mixed performance indicators suggesting potential challenges and benefits from restructuring and acquisitions [1][2]. Group 1: Earnings Performance - PPG Industries missed the Zacks Consensus Estimate for earnings in two of the last four quarters, with an average negative earnings surprise of approximately 0.6% [2]. - The Earnings ESP for PPG is +1.35%, with the Zacks Consensus Estimate for the first quarter set at $1.62 [6]. - PPG currently holds a Zacks Rank 3, indicating a neutral outlook [7]. Group 2: Revenue Estimates - The Zacks Consensus Estimate for PPG's sales in the upcoming quarter is $3,655.9 million, reflecting a decline of about 15.2% year-over-year [7]. - Estimated net sales for the Industrial Coatings segment are projected at $1,556.8 million, indicating an 8.4% decline year-over-year [8]. - The Performance Coatings segment is expected to see net sales of $1,199.3 million, suggesting a 1.3% year-over-year increase, while the Global Architectural Coatings segment is estimated at $967.9 million, indicating a 0.2% rise [8]. Group 3: Strategic Initiatives - PPG is implementing aggressive cost-cutting and restructuring strategies, anticipating around $45 million in restructuring savings for the full year 2025 [9]. - A comprehensive cost reduction program is expected to yield pre-tax savings of $60 million in 2025, primarily targeting structural costs in Europe and other global operations [9]. - The company is also raising selling prices across its segments to counteract cost inflation and enhance profitability [10]. Group 4: Market Challenges - PPG faces challenges from weak global industrial production, particularly affecting demand in the Industrial Coatings unit [12]. - Lower automotive OEM build rates and reduced industrial production in the U.S. and Europe are anticipated to negatively impact volumes and sales [12][13]. - Weak consumer confidence in Europe is further contributing to decreased demand [12].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings and revenues for PPG Industries in the upcoming earnings report, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - PPG Industries is expected to report quarterly earnings of $1.62 per share, reflecting a year-over-year decrease of 12.9% [3]. - Revenues are projected to be $3.65 billion, down 15.3% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 1.39% lower in the last 30 days, indicating a reassessment by analysts [4]. - A positive Earnings ESP of +4.16% suggests analysts have recently become more optimistic about PPG's earnings prospects [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. - PPG Industries currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, PPG Industries was expected to post earnings of $1.65 per share but delivered $1.61, resulting in a surprise of -2.42% [12]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [13]. Conclusion - While PPG Industries is seen as a potential earnings-beat candidate, other factors should also be considered when evaluating the stock ahead of its earnings release [16].