PPG Gains on Cost Actions and Acquisitions Amid Demand Softness

Core Insights - PPG Industries is experiencing challenges due to demand weakness, particularly in Europe, but is benefiting from cost discipline, acquisitions, and pricing actions [1][6][9] Financial Performance - PPG's second-quarter adjusted earnings were $2.22 per share, matching estimates but down from $2.35 a year earlier [1] - The company reported a roughly 1% decline in revenue, with higher sales in the Performance Coatings unit offset by declines in Global Architectural Coatings and Industrial Coatings segments [1] Cost Management and Restructuring - PPG is implementing a cost-cutting and restructuring strategy, realizing an additional $20 million in structural cost savings in Q2 2025, with expectations of around $60 million in total savings for the full year [2][9] - A comprehensive cost reduction program is expected to deliver annualized pre-tax savings of approximately $175 million once fully implemented, focusing on structural costs mainly in Europe [3] Acquisitions and Growth Strategy - The company is pursuing inorganic growth through acquisitions, including Tikkurila, Worwag, Cetelon, and Arsonsisi's powder coatings business, which are expected to contribute positively to its revenue [4][9] Shareholder Returns - PPG has a strong track record of returning cash to shareholders, having returned $1.4 billion in 2024 through dividends and share buybacks, with a quarterly dividend increase of 4% in July 2025 [5] Market Challenges - The company faces challenges from soft global industrial production, particularly affecting the Industrial Coatings segment, with lower automotive OEM build rates and weak consumer confidence in Europe [6][8] - Demand in the Global Architectural Coatings segment fell by 5% due to lower sales volumes and weaker consumer confidence in Europe [8] Future Outlook - PPG maintains its full-year 2025 adjusted earnings per share guidance of $7.75 to $8.05, supported by share gains and internal improvement initiatives despite current economic conditions [9]