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].

Core Viewpoint - PPG Industries is experiencing challenges due to weak demand, particularly in Europe, but is benefiting from pricing actions, improved manufacturing efficiencies, cost discipline, and acquisitions [1][9]. Group 1: Financial Performance and Strategies - The company has implemented a cost-cutting and restructuring strategy, optimizing working capital, which is expected to generate significant cost savings [4]. - PPG realized an additional $15 million in structural cost savings in Q4 2024 and anticipates around $45 million in restructuring savings for the full year 2025 [4]. - A comprehensive cost reduction program is expected to deliver pre-tax savings of $60 million in 2025, focusing on structural costs mainly in Europe [4]. - PPG has achieved nine consecutive quarters of segment EBITDA margin expansion, indicating a commitment to enhancing profitability [5]. Group 2: Acquisitions and Growth - The company is pursuing inorganic growth through acquisitions, with contributions expected from recent acquisitions such as Tikkurila, Worwag, Cetelon, and Arsonsisi's powder coatings business [6]. - PPG returned $1.4 billion to shareholders in 2024 through dividends and share repurchases, with $620 million in dividends and $750 million in share buybacks [8]. Group 3: Market Challenges - PPG faces soft demand conditions, particularly in the automotive sector, with lower OEM build rates and industrial production impacting sales in the Industrial Coatings unit [9]. - The company anticipates a low single-digit to mid-single-digit percentage decline in industrial coatings segment sales in Q1 2025 due to subdued global industrial production [10]. - Overall organic growth is expected to be limited by lower automotive OEM and industrial production in the first quarter, with continued pressure on industrial coatings demand [10].

Group 1: Corporate Initiatives - PPG Industries Inc. has joined the Make it Zero initiative, focusing on reducing scope 3 greenhouse gas emissions in the DIY home improvement sector [1] - As a member of the initiative's task force, PPG is working on standardized methods for tracking and measuring carbon emissions, promoting best practices in reporting, and reducing scope 3 emissions [2] - The company is committed to collaborating with customers and suppliers to achieve sustainability goals and transition to lower-carbon products [3] Group 2: Financial Performance - PPG's shares have declined by 25.1% over the past year, while the industry has seen a smaller decline of 7.1% [4] - The company expects adjusted earnings per share (EPS) for 2025 to be between $7.75 and $8.05, indicating a 7% increase at the midpoint, excluding foreign currency impacts and higher tax rates [5] - Annual EPS growth is anticipated to be concentrated in the second half of 2025, with expectations of over $100 million in annualized share gains in the Industrial Coatings segment starting in the second half of this year [6]

Company Overview - PPG Industries (PPG) shares increased by 12.5% to close at $103.11, following a significant volume of trading, contrasting with a 19.2% loss over the past four weeks [1] - The rally in PPG's stock is attributed to a surge in material stocks after President Trump announced a 90-day pause on reciprocal tariffs for most countries [1] Earnings Expectations - PPG is expected to report quarterly earnings of $1.62 per share, reflecting a year-over-year decline of 12.9%, with revenues anticipated at $3.64 billion, down 15.5% from the previous year [2] - The consensus EPS estimate for PPG has been revised marginally higher over the last 30 days, indicating a potential for price appreciation if the positive trend continues [3] Industry Context - PPG Industries is part of the Zacks Chemical - Specialty industry, which includes other companies like Celanese (CE), whose stock closed 17.1% higher at $43.90, despite a 31.4% decline over the past month [3] - Celanese's consensus EPS estimate has decreased by 4.4% to $0.40, representing an 80.8% drop from the previous year's report, and it currently holds a Zacks Rank of 5 (Strong Sell) [4]

Company Developments - PPG Industries has launched a waterborne automotive coatings manufacturing plant in Samut Prakan, Thailand, with an annual production capacity of 2,000 tons to meet the rising demand for sustainable coatings in Southeast Asia [1] - The new facility includes an automated spray application center aimed at enhancing services and improving competitiveness in the global market [2] - PPG is focusing on the Southeast Asian market, particularly in the automotive sector, and plans to partner with Chinese brands like BYD and Chery for localized production and technical support [3] Financial Outlook - PPG missed fourth-quarter 2024 earnings and sales estimates but projects adjusted EPS for 2025 to be between $7.75 and $8.05, indicating a 7% increase at the midpoint, with growth expected in the second half of 2025 [4] - PPG aims to achieve over $100 million in annualized share gains in its Industrial Coatings segment starting in the second half of 2025 [4] Industry Comparisons - Dow Inc. anticipates benefits from near-term projects and increased operational focus in 2025, with a cost-cutting initiative of $1 billion, including workforce reductions of 1,500 roles globally [5] - DuPont projects consolidated net sales for 2025 to be between $12.8 billion and $12.9 billion, with adjusted EPS forecasted between $4.30 and $4.40 [6] - Eastman Chemical expects modest volume growth in its specialty businesses in 2025, with an EBITDA growth commitment of $75-$100 million [7]

Financial Performance - Net sales for 2024 were approximately $15.8 billion, a decrease of 2% compared to 2023, primarily due to declining sales volumes and unfavorable foreign currency translation [111]. - Income before income taxes increased by $162 million to $1,852 million in 2024, driven by lower raw material costs and restructuring savings [112]. - Cost of sales, exclusive of depreciation and amortization, decreased by $426 million to $9,252 million in 2024, representing 58.4% of net sales [117]. - Earnings per diluted share from continuing operations increased to $5.72 in 2024, up 10.9% from $5.16 in 2023 [136]. - Adjusted earnings per diluted share rose by 6% to $7.87 in 2024 compared to $7.42 in 2023 [141]. - The effective tax rate for continuing operations was 25.6% in 2024, an increase of 0.3% from the previous year [138]. - The effective tax rate for 2025 is expected to be in the range of 23% to 25%, an increase compared to the 2024 adjusted effective tax rate [151]. Cash Flow and Capital Management - The company generated $1.4 billion in operating cash flow during 2024, demonstrating resilience in a challenging macroeconomic environment [141]. - PPG ended 2024 with approximately $1.4 billion in cash and short-term investments, expecting strong cash generation in 2025 [153]. - Cash from operating activities for continuing operations decreased by $903 million to $1,391 million in 2024, primarily due to unfavorable changes in working capital [198]. - Cash used for investing activities decreased by $126 million to $399 million in 2024, a 24.0% decline compared to 2023, primarily due to proceeds from the sale of the silicas products business [206]. - Cash used for financing activities decreased by $125 million to $1,425 million in 2024, an 8.1% decline compared to 2023, mainly due to lower repayments of long-term debt [212]. - PPG repurchased approximately nine million shares of stock over four years, including $752 million in 2024, with $2.8 billion remaining under its current share repurchase authorization [152]. - Dividends paid to shareholders increased to $622 million in 2024, marking the 53rd consecutive year of increased annual per-share dividend payments, with a 5% increase in the quarterly dividend to $0.68 per share [215]. - The company expects capital expenditures for 2025 to be approximately $725 million to $775 million, aimed at supporting future organic growth opportunities [210]. Segment Performance - Global Architectural Coatings net sales decreased by 2.5% in 2024 to $3,921 million, primarily due to lower sales volumes [158]. - Segment income for Global Architectural Coatings increased by $5 million year over year, driven by higher selling prices and moderating raw material costs [163]. - Architectural coatings EMEA organic sales were flat year over year, with higher selling prices offset by lower sales volumes [166]. - Segment income for Performance Coatings increased by $123 million year over year, primarily due to higher selling prices and moderating raw material costs [174]. - Performance Coatings net sales increased by 2% in 2024, driven by higher selling prices (+6%) and partially offset by lower sales volumes (-5%) and divestitures (-2%) [170]. - Aerospace coatings organic sales increased by a double-digit percentage, supported by strong demand and customer order backlogs [172]. - Industrial Coatings segment net sales decreased by $402 million year over year, primarily due to lower selling prices and lower sales volumes driven by lower industry demand [180]. - Automotive OEM coatings organic sales decreased by a high single-digit percentage year over year due to lower sales volumes and indexed-based selling prices [181]. Cost Management and Restructuring - A comprehensive cost reduction program was approved in October 2024, focusing on reducing structural costs primarily in Europe [128]. - Total restructuring savings were approximately $40 million in 2024, with an anticipated annualized pre-tax savings of approximately $175 million once fully implemented, including $60 million in 2025 [146]. - PPG incurred wage inflation in 2024, impacting operating costs, but raw material costs were favorable compared to 2023 [148]. - Selling price improvements were achieved across several businesses in 2024, with careful monitoring of costs planned for 2025 [149]. Foreign Currency and Market Risks - Foreign currency exchange rates had a net unfavorable impact on net income from continuing operations of approximately $20 million in 2024, expected to continue in 2025 [150]. - The unfavorable impact of foreign currency translation on full year 2024 Income before income taxes was approximately $20 million, attributed to the strengthening of the U.S. dollar against the Mexican peso and Chinese yuan [236]. - A 10% adverse change in exchange rates for European and Canadian currencies could reduce Income before income taxes by $429 million in 2024, compared to $402 million in 2023 [243]. - PPG had non-U.S. dollar denominated debt of $3.3 billion as of December 31, 2024, with a potential unrealized translation loss of $369 million if the U.S. dollar weakens by 10% against European currencies [245]. - The company is exposed to market risks related to changes in foreign currency exchange rates and interest rates, and may use derivative financial instruments to manage these risks [241]. Debt and Capitalization - Total indebtedness to total capitalization ratio was 45% as of December 31, 2024, well below the 60% limit set by credit agreements [221]. - Long-term debt obligations total $5,808 million, with $933 million due in 2025 [224]. - The total amount of unrecognized tax benefits for uncertain tax positions was $152 million as of December 31, 2024 [226]. - As of December 31, 2024, consolidated net assets decreased by $905 million compared to December 31, 2023, primarily due to the strengthening of the U.S. dollar against the Mexican peso [235]. - The fair value of foreign currency forward contracts was a net liability of $53 million as of December 31, 2024, compared to a net asset of $23 million as of December 31, 2023 [243]. - Interest rate swaps converted $375 million of fixed rate debt to variable rate debt, with fair values of liabilities at $16 million as of December 31, 2024 [246]. - A 10% increase in variable interest rates would increase annual interest expense by $3 million for U.S., Canada, Mexico, and Europe, and by $2 million for Asia and South America [246]. - The fair value of U.S. dollar to euro cross currency swap contracts was a net asset of $50 million as of December 31, 2024 [244].

Company Overview - PPG Industries Inc. has expanded its non-bisphenol A (BPA) HOBA internal coatings line with the introduction of PPG Hoba Pro 2848 coating, aimed at the growing demand for aluminum bottle packaging for beverages [1][2] - The new coating was showcased at Paris Packaging Week and received an Aerosol and Dispensing Forum (ADF) Innovation Award [1] Product Details - PPG Hoba coatings have been utilized for five decades in aluminum aerosol cans and tubes for personal care products, and the new product targets the sustainable packaging market for beverages [2] - PPG Hoba Pro 2848 is a non-bisphenol, PFAS-NI, and non-phenolic internal liner that offers improved interior protection for various applications including personal care, beverages, pharmaceuticals, and food [3] Market Performance - PPG Industries shares have decreased by 19.3% over the past year, while the industry has seen a decline of 16.6% during the same period [4] - The company expects adjusted earnings per share (EPS) for 2025 to be between $7.75 and $8.05, indicating a 7% increase at the midpoint, excluding foreign currency translation and higher tax rates [5] Future Outlook - Annual EPS growth is anticipated to be concentrated in the second half of 2025, with expectations of more than $100 million in annualized share gains in the Industrial Coatings segment starting in the second half of this year [6]

Core Viewpoint - PPG Industries reported disappointing fourth-quarter adjusted EPS results and provided FY25 adjusted EPS guidance below market expectations [1][2]. Financial Performance - PPG's quarterly earnings were $1.61 per share, missing the analyst consensus estimate of $1.65 per share [1]. - The company achieved a 6% growth in adjusted EPS for the year 2024, generating $1.4 billion in operating cash flow [2]. - PPG returned $1.4 billion to shareholders through stock repurchases and dividends during the year, with approximately $250 million repurchased in the fourth quarter [2]. Future Guidance - PPG expects adjusted EPS for FY25 to be in the range of $7.75-$8.05, significantly below market estimates of $8.68 [2]. Market Reaction - Following the earnings announcement, PPG shares fell 2.9% to trade at $112.07 [3]. - Analysts adjusted their price targets for PPG, with Wells Fargo lowering it from $150 to $135, Mizuho from $150 to $140, and Barclays from $144 to $125 [4].

Core Viewpoint - PPG Industries reported mixed financial results for the fourth quarter of 2024, with adjusted earnings per share (EPS) slightly increasing year-over-year but missing consensus estimates, while revenues declined significantly compared to the previous year [1][2][7]. Financial Performance - Adjusted EPS for Q4 2024 was $1.61, up from $1.56 in Q4 2023, but below the Zacks Consensus Estimate of $1.65 [1] - Revenues for the quarter were $3,729 million, a decrease of approximately 5% year-over-year, missing the consensus estimate of $4,005.5 million [2] - For the full year 2024, adjusted EPS was $7.87 compared to $7.42 in 2023, while net sales decreased by 2% to $15,845 million [7] Segment Analysis - Performance Coatings segment revenues increased by 2% to $1,262 million, driven by growth in aerospace, protective and marine coatings, and traffic solutions [4] - Industrial Coatings segment revenues fell by 9% year-over-year to $1,586 million, primarily due to lower sales volumes and prices, with a significant drop in automotive OEM coatings [5] - Global Architectural Coatings segment reported revenues of $881 million, down 7% year-over-year, mainly due to unfavorable foreign currency impacts [6] Sales and Market Trends - Organic sales declined by a low single-digit percentage year-over-year, with growth in Mexico, China, and India, offsetting declines in automotive OEM and industrial coatings [3] - The aerospace order backlog grew to approximately $300 million, indicating strong demand in that sector [4] Financial Position - At the end of Q4 2024, PPG had around $1.4 billion in cash and short-term investments, with net debt at $4.5 billion, a decrease of roughly $30 million from the previous year [8] Future Outlook - PPG expects adjusted EPS for 2025 to range between $7.75 and $8.05, indicating a potential 7% increase at the midpoint, based on current economic conditions and mixed demand across regions [9] - The company anticipates that annual EPS growth will be concentrated in the second half of 2025, with plans to achieve over $100 million in annualized share gains in the Industrial Coatings segment starting in the second half of 2024 [10] Stock Performance - PPG Industries' shares have decreased by 13.2% over the past year, compared to a 15.4% decline in the industry during the same period [11]

Fourth Quarter 2024 Financial Results January 30, 2025 Forward-Looking Statements This presentation contains forward-looking statements that reflect the Company's current views with respect to future events and financial performance. You can identify forward-looking statements by the fact that they do not relate strictly to current or historic facts. Forward-looking statements are identified by the use of the words "aim," "believe," "expect," "anticipate," "intend," "estimate," "project," "outlook," "foreca ...