PPG Industries(US:PPG)2025-10-29 18:26Financial Performance - Net sales for the three months ended September 30, 2025, were approximately $4.1 billion, a 1% increase compared to the prior year, driven by higher selling prices and sales volumes [122]. - Income before income taxes was $556 million for the three months ended September 30, 2025, a decrease of $22 million from the prior year, primarily due to wage and cost inflation [123]. - Selling, general and administrative expenses decreased by $24 million to $824 million for the three months ended September 30, 2025, due to cost-control measures [128]. - Earnings per diluted share from continuing operations increased by 3.2% to $1.96 for the three months ended September 30, 2025, attributed to higher selling prices and cost-control actions [135]. - Segment income was $675 million, a decrease of 5% versus the prior year, primarily due to lower index-based selling prices and the unfavorable impact of the divestiture of the silicas products business [174]. Sales Performance by Segment - Global Architectural Coatings net sales for the nine months ended September 30, 2025, decreased by 5.0% to $2,887 million, with segment income down 17.5% to $462 million [145]. - Performance Coatings net sales increased by 5.4% year-over-year for the nine months ended September 30, 2025, reaching $4,191 million, while segment income rose 2.2% to $902 million [154]. - Industrial Coatings segment net sales for the nine months ended September 30, 2025, decreased by 4.3% to $4,883 million, with segment income down 4.7% to $675 million [165]. - Aerospace coatings organic sales increased by a double-digit percentage year-over-year, with customer order backlogs reaching approximately $310 million [161]. - Automotive OEM coatings organic sales increased by a mid-single-digit percentage due to higher sales volumes, particularly in Brazil and China [166]. - Packaging coatings organic sales increased by a double-digit percentage year-over-year, driven by higher sales volumes in the U.S., Canada, and Asia Pacific [170]. - Specialty products organic sales increased by a low single-digit percentage year over year, primarily due to higher sales volumes [174]. Cost and Expenses - Depreciation expense increased by 19.1% to $106 million for the three months ended September 30, 2025, primarily due to higher accelerated depreciation related to restructuring actions [129]. - Research and development expenses increased by 3.9% to $106 million for the three months ended September 30, 2025 [125]. - Other charges/(income), net increased by $24 million primarily due to net impairment and related charges in the Performance Coatings segment [130]. Cash Flow and Capital Expenditures - Cash from operating activities for the nine months ended September 30, 2025, was $1,047 million, a decrease of $9 million compared to $1,056 million in 2024 [180]. - Cash used for investing activities decreased to $417 million for the nine months ended September 30, 2025, from $501 million in 2024 [184]. - Total capital spending is expected to be approximately $725 million to $775 million in 2025 to support future organic growth opportunities [184]. Tax and Indebtedness - The effective tax rate for the three months ended September 30, 2025, was 21.2%, a decrease of 0.9% from the prior year [135]. - As of September 30, 2025, Total Indebtedness to Total Capitalization was 47%, below the 60% threshold required by credit agreements [189]. Currency and Market Risk - The U.S. dollar weakened against several currencies, resulting in an increase of consolidated net assets by $849 million compared to December 31, 2024 [193]. - A 10% weakening of the U.S. dollar against European currencies would result in unrealized translation losses of $535 million at September 30, 2025, compared to $369 million at December 31, 2024 [208]. - There were no material changes in the Company's exposure to market risk from December 31, 2024, to September 30, 2025 [210].