Core Viewpoint - PPG Industries, Inc. is investing $380 million in a new aerospace coatings and sealants manufacturing facility in Shelby, NC, set to begin construction in October 2025 and expected to be completed in the first half of 2027 [1][2]. Group 1: Investment and Employment - The new facility will create over 110 jobs to meet the increasing demands of the aerospace industry by producing a full line of PPG's aerospace coatings and sealants [2]. - The facility will span 198,000 square feet and is expected to enhance supply-chain management and operational efficiency due to its proximity to transport links [2]. Group 2: Environmental Considerations - PPG is focusing on environmental implications by incorporating advanced manufacturing technologies and practices aimed at reducing environmental impact while ensuring high standards of quality and safety [3]. Group 3: Market Performance - PPG's stock has declined by 16.3% over the past year, contrasting with a 1.4% decline in the industry [4].

Core Viewpoint - PPG reported a decline in net sales for Q1 2025, with a total of $3.684 billion, down 4.0% year-over-year, influenced by foreign currency translation and business divestitures, despite a 1% increase in organic sales [1][4][5] Financial Performance - The company achieved an operating profit of $380 million, a decrease of 8.21% year-over-year, with a segment profit margin of 16.5% and an EBITDA margin of 19.4% [1][4] - Net profit for the quarter was $375 million, down 7.0% year-over-year, while adjusted net profit was $396 million, reflecting an 11.0% decline [1][4] Segment Performance - The high-performance coatings segment saw a 9% organic sales growth, driven by strong demand in automotive refinish and aerospace coatings, with double-digit growth in several areas [4][15] - The architectural coatings segment reported net sales of $857 million, down 11.0% year-over-year, impacted by foreign currency translation and business divestitures [10][11] - The industrial coatings segment's net sales were $1.562 billion, down 8.0% year-over-year, with organic sales declining by 2% due to lower sales prices and volumes [20][21] Regional Performance - Organic sales in the Asia-Pacific region increased, while the U.S. saw a 4% organic sales growth, marking a recovery after six quarters of decline [4][7] - European organic sales decreased by 1%, showing improvement compared to previous quarters, indicating stabilizing demand [4][11] Cost Management and Shareholder Value - The company repurchased approximately $400 million in stock during the quarter, maintaining a strong balance sheet and focusing on shareholder value creation [4][5][23] - PPG anticipates annual savings of $75 million from cost management initiatives and is committed to adapting to economic uncertainties [5][7] Future Outlook - PPG maintains its adjusted earnings per share guidance for 2025 in the range of $7.75 to $8.05, supported by organic sales momentum and market share growth [5][29] - The company expects total organic sales for Q2 2025 to remain flat to low single-digit growth, with varying performance across segments [29]

Financial Performance - Net sales for the three months ended March 31, 2025, were approximately $3.7 billion, a decrease of 4.3% compared to the prior year, primarily due to unfavorable foreign currency translation and divestitures [116]. - Income before income taxes was $502 million, a decrease of $40 million year-over-year, mainly due to foreign currency translation impacts and cost inflation [117]. - The effective tax rate for the three months ended March 31, 2025, was 24.3%, compared to 23.6% in the prior year [126]. - Earnings per diluted share from continuing operations decreased to $1.64, down 4.1% from $1.71 in the prior year [126]. Segment Performance - Global Architectural Coatings net sales decreased by 11.3% to $857 million, with segment income down 28.9% to $118 million [131]. - Performance Coatings net sales increased by 6.8% to $1.265 billion, with segment income rising 9.2% to $274 million [138]. - Industrial Coatings segment net sales decreased by 8.1% to $1,562 million in Q1 2025 compared to $1,699 million in Q1 2024 [146]. - Automotive OEM coatings organic sales decreased by a mid-single-digit percentage in Q1 2025 due to lower sales volumes and indexed-based selling prices [147]. - Packaging coatings organic sales increased by a low single-digit percentage compared to the prior year, driven by higher sales volumes in Europe, Latin America, and Asia Pacific [149]. - Specialty coatings and materials organic sales increased by a mid-single-digit percentage compared to Q1 2024, with segment income at $215 million, a decrease of 14% year-over-year [150]. Sales Expectations - Organic sales in the Performance Coatings segment are expected to continue growing in the second quarter of 2025, driven by industry growth and share gains [141]. - The company anticipates aggregate organic sales for the Global Architectural Coatings segment to be flat to a low single-digit percentage increase compared to the second quarter of 2024 [137]. - In the second quarter, aggregate organic sales for the aerospace coatings and protective and marine coatings segments are expected to increase by a low to mid-single-digit percentage compared to Q2 2024 [144]. Cash and Investments - Cash and short-term investments totaled $1.9 billion as of March 31, 2025, up from $1.4 billion at December 31, 2024 [154]. - Cash used for operating activities in Q1 2025 was $16 million, compared to cash from operating activities of $7 million in Q1 2024, reflecting unfavorable changes in working capital [155]. Capital Expenditures and Restructuring - Total capital spending is expected to be approximately $725 million to $775 million in 2025 to support future organic growth opportunities [159]. - The Company expects total restructuring savings of $75 million in 2025, with cash outlays related to these actions projected at approximately $100 million [166]. Debt and Financial Risk - As of March 31, 2025, the Total Indebtedness to Total Capitalization ratio was 50%, within the required limit of 60% [163]. - As of March 31, 2025, PPG had non-U.S. dollar denominated borrowings of $4.8 billion, up from $3.3 billion as of December 31, 2024 [181]. - The fair value of foreign currency forward contracts was a net liability of $31 million as of March 31, 2025, compared to $53 million as of December 31, 2024 [179]. - A 10% increase in the value of the euro to the U.S. dollar would reduce the fair value of PPG's cross currency swap contracts by $36 million as of March 31, 2025 [180]. - A weakening of the U.S. dollar by 10% against European currencies would result in unrealized translation losses of $530 million at March 31, 2025 [181]. - PPG's interest rate swaps converted $375 million of fixed rate debt to variable rate debt, with fair values of liabilities at $11 million as of March 31, 2025 [182]. - An increase in variable interest rates of 10% would increase annual interest expense by $4 million for the period ended March 31, 2025 [182]. - The potential reduction in PPG's income before income taxes from adverse changes in exchange rates was $479 million for the three months ended March 31, 2025 [179]. - The fair value of cross currency swap contracts was a net asset of $39 million as of March 31, 2025, down from $50 million as of December 31, 2024 [180]. - A 10% increase in interest rates in the U.S., Canada, Mexico, and Europe would increase annual interest expense by $4 million [182]. - There were no material changes in the Company's exposure to market risk from December 31, 2024, to March 31, 2025 [183].

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]