A month has gone by since the last earnings report for PPG Industries (PPG) . Shares have added about 8% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is PPG Industries due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.PPG Industries' Earn ...

Core Insights - PPG Industries reported a fourth-quarter 2025 profit of $302 million or $1.34 per share, a significant increase from $2 million or a penny per share a year ago, but adjusted earnings per share of $1.51 fell short of the Zacks Consensus Estimate of $1.57 [1][9] - The company's revenues reached $3,914 million, reflecting a 5% year-over-year increase and surpassing the Zacks Consensus Estimate of $3,744.6 million [2][9] Segment Review - The Global Architectural Coatings segment experienced an 8% year-over-year sales increase to $951 million, exceeding estimates due to higher selling prices and favorable foreign currency translation, partially offset by the divestiture of the architectural coatings business in Russia [3] - The Performance Coatings segment saw a 5% year-over-year sales rise to $1,322 million, driven by higher selling prices and favorable currency impacts, despite reduced sales volumes; organic sales grew 3% year over year [4] - The Industrial Coatings segment's sales grew 3% year-over-year to $1,641 million, benefiting from foreign currency translation gains and improved volumes, surpassing estimates [5] Financials - As of the end of the quarter, PPG had $2,163 million in cash and cash equivalents, a 70% increase year over year; long-term debt rose to $6.6 billion, up 35% from the prior-year quarter [6] Outlook - PPG anticipates adjusted earnings per share of $7.70 to $8.10 for full-year 2026, citing ongoing soft global industrial production and mixed regional demand; organic sales are expected to show flat to low single-digit percentage growth [7][9] Price Performance - PPG shares have declined by 11.7% over the past year, contrasting with a 0.4% rise in its industry [8]

Financial Data and Key Metrics Changes - For the full year 2025, net sales totaled $15.9 billion, with 2% organic growth driven by higher selling prices and volume gains across segments [8] - Adjusted earnings per share (EPS) came in at $7.58, indicating solid profitability [8] - Cash from operations increased to $1.9 billion, up about $500 million year-over-year, supporting a free cash flow yield of 5% [8] - Segment EBITDA margin for the year was 19%, reflecting operational efficiency and cost discipline [9] Business Line Data and Key Metrics Changes - Global Architectural Coatings segment saw fourth quarter net sales rise 8% to $951 million, with 2% organic growth driven by strong retail performance in Mexico [11] - Performance Coatings segment delivered 5% net sales growth to $1.3 billion, led by double-digit organic growth in Aerospace [12] - Automotive OEM net sales increased 6%, outpacing the industry due to share gains and customer mix [10] - Industrial Coatings segment net sales grew 3% to $1.6 billion, with organic growth fueled by share gains [15] Market Data and Key Metrics Changes - Positive sales volume growth was achieved in all regions, with Asia Pacific leading at mid-single-digit percentage growth [10] - Architectural Coatings demand in Europe was mixed, with a low single-digit percentage decline partially offset by favorable pricing [11] - The U.S. accident claims were down only 2% year-over-year in December, indicating a normalization trend [13] Company Strategy and Development Direction - The company emphasizes high-margin business growth, strong cash flow generation, disciplined capital allocation, and operational excellence [22] - Investments in customer innovation, including digital and AI capabilities, are aimed at maintaining technology leadership in coatings and specialty materials [22] - The company plans to sequentially pace back capital expenditures to historical levels of approximately 3% of sales by 2027 [18] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment remains mixed, but the company expects organic sales growth driven by Aerospace and Architectural Coatings in Mexico [19] - Despite challenges in global industrial and automotive demand, the company anticipates sales volume growth and positive pricing in 2026 [20] - The raw material basket remains favorable, with expected overall flat raw material costs for the year [21] Other Important Information - The company returned $1.4 billion to shareholders through dividends and share repurchases [18] - The balance sheet remains strong, with a cash balance of $2.2 billion and a net debt position of $5.1 billion [18] - The company launched its first AI-formulated product in Refinish, enhancing productivity for body shops [54] Q&A Session Summary Question: Insights on organic growth in Q4 and 2026 guidance - Management indicated that growth was driven by macro factors, share gains, and technology introductions, with Aerospace and Mexico showing strong performance [26][28] Question: Details on total volumes and price for organic growth in 2026 - Positive pricing is expected in performance and architectural businesses, while volume growth is anticipated in Aerospace and Automotive OEM [30][32] Question: Operating leverage and EBITDA growth - The decline in EBITDA was primarily due to destocking in the Refinish segment, which is expected to normalize in the second half of 2026 [36][37] Question: Update on Refinish and claims data - Management noted that normalization of buying patterns is expected in the second half of 2026, with ongoing share gains and productivity solutions driving growth [43][46] Question: Aerospace growth and capacity constraints - Aerospace sales growth was double-digit in 2025, with expectations for high single-digit growth in 2026, though capacity constraints are acknowledged [49] Question: AI reformulation activity - The company has launched AI-optimized products and is leveraging digitized data for formulation improvements, positioning itself ahead of competitors [54][56] Question: Focus on organic vs. inorganic growth - The company prioritizes organic growth but remains open to acquisitions that align with its strategy and enhance shareholder value [60][61]

Core Viewpoint - PPG has achieved REDCert² certification for its Architectural Coatings manufacturing sites in Amsterdam and Søborg, confirming the use of sustainable raw materials through a certified chain of custody [1] Group 1 - The REDCert² certification employs a mass balance approach, which is a recognized method for attributing the sustainability value of certified inputs [1] - This certification ensures that PPG's products reflect responsible sourcing throughout the manufacturing process [1]

Core Insights - PPG Industries is navigating challenges from demand weakness, particularly in Europe, while benefiting from cost discipline, acquisitions, and pricing actions [1] Cost Management and Restructuring - PPG is implementing a cost-cutting and restructuring strategy, focusing on regions and end markets with weak business conditions, realizing an additional $20 million in structural cost savings in Q2 2025, and expecting around $60 million in restructuring savings for the full year 2025 [2][9] - A comprehensive cost reduction program is expected to deliver annualized pre-tax savings of approximately $175 million once fully implemented, primarily targeting structural costs in Europe and other global businesses [3][9] Acquisitions and Growth Strategy - The company is pursuing inorganic growth through value-creating acquisitions, with contributions from acquisitions like Tikkurila, Worwag, Cetelon, and Arsonsisi's powder coatings business expected to enhance its top line [4][9] Financial Performance and Shareholder Returns - PPG has a strong track record of returning cash to shareholders, having returned $1.4 billion in 2024 through dividends and share repurchases, including $620 million in dividends and $750 million in share buybacks [5] - The company raised its quarterly dividend by 4% in July 2025, reflecting robust financial performance with operating cash flow reaching around $1.4 billion in 2024 [5] Market Challenges - PPG faces challenges from soft global industrial production, impacting demand in the Industrial Coatings segment, with lower automotive OEM build rates and weak consumer confidence in Europe contributing to reduced volumes and sales [6][8] - Overall organic growth is expected to be limited due to these factors, with industrial coatings demand anticipated to remain under pressure in the third quarter [7][9] Earnings Guidance - PPG maintained its full-year 2025 adjusted earnings per share guidance of $7.75 to $8.05, supported by continued share gains and internal improvement initiatives while considering current global economic conditions [9]

Core Viewpoint - PPG Industries has shown a positive stock performance of approximately 5.5% since its last earnings report, outperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings release [1]. Financial Performance - PPG Industries reported Q2 2025 profit of $450 million, or $1.98 per share, a decrease from $493 million, or $2.09 per share, in the same quarter last year [2]. - Adjusted earnings per share, excluding one-time items, fell to $2.22 from $2.35 year-over-year, meeting the Zacks Consensus Estimate [2]. - Revenues for the quarter were approximately $4.19 billion, down 1% year-over-year, but exceeded the Zacks Consensus Estimate of $4.13 billion [3]. Segment Review - The Global Architectural Coatings segment experienced a 5% year-over-year decline in sales to $1.02 billion, surpassing estimates of $1 billion, primarily due to the divestiture of the architectural coatings business in Russia and lower sales volumes, partially offset by higher selling prices [4]. - The Performance Coatings segment saw a 7% year-over-year increase in sales to $1.51 billion, exceeding estimates of $1.44 billion, driven by a 6% rise in organic sales and increases in selling prices and volume [5]. - The Industrial Coatings segment's sales declined 5% year-over-year to $1.67 billion, surpassing estimates of $1.63 billion, mainly due to the divestiture of the silicas products business in late 2024 [6]. Financial Position - As of the end of the quarter, the company had $1.56 billion in cash and cash equivalents, with net debt increasing to $5.7 billion, up $479 million from the prior year [7]. Outlook - The company maintained its full-year 2025 adjusted earnings per share guidance of $7.75 to $8.05, supported by continued market share gains and internal improvement initiatives, while considering current global economic conditions and varied demand trends [8]. - Recent estimates for the stock have shown a downward trend, indicating a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [12]. Industry Comparison - PPG Industries operates within the Zacks Chemical - Specialty industry, where RPM International, a peer, has gained 6% over the past month, reporting revenues of $2.08 billion for the last quarter, reflecting a year-over-year increase of 3.7% [13].

Core Insights - PPG Industries, Inc. reported a second-quarter 2025 profit of $450 million or $1.98 per share, a decrease from $493 million or $2.09 per share in the same quarter last year [1] - Adjusted earnings per share for the quarter were $2.22, down from $2.35 year-over-year, meeting the Zacks Consensus Estimate [1] - Revenues for the quarter were $4,195 million, a 1% decline year-over-year, but exceeded the Zacks Consensus Estimate of $4,131.6 million [1] Segment Review - The Global Architectural Coatings segment experienced a 5% year-over-year decline in sales to $1,018 million, surpassing estimates of $1,002.6 million, primarily due to the divestiture of the architectural coatings business in Russia and lower sales volumes, partially offset by higher selling prices [2] - The Performance Coatings segment saw a 7% year-over-year increase in sales to $1,512 million, exceeding estimates of $1,439.3 million, driven by a 6% rise in organic sales along with increases in selling prices and volume [3] - The Industrial Coatings segment's sales declined 5% year-over-year to $1,665 million, surpassing estimates of $1,632.2 million, mainly due to the divestiture of the silicas products business in late 2024 [4] Financials - As of the end of the quarter, the company had $1,561 million in cash and cash equivalents, with net debt increasing to $5.7 billion, up $479 million from the prior-year quarter [5] Outlook - The company maintained its full-year 2025 adjusted earnings per share guidance of $7.75 to $8.05, supported by continued share gains and internal improvement initiatives, while considering current global economic conditions and varied demand trends [6] Price Performance - PPG shares have declined by 11.6% over the past year, compared to a 3.3% decline in its industry [7]

Core Insights - The Sherwin-Williams Company has reduced its adjusted earnings per share guidance for 2025 due to weaker-than-expected architectural sales volumes and ongoing supply chain inefficiencies, indicating a "softer for longer" demand environment [6][13][25] - The company has doubled its restructuring target to $105 million, with expected annualized savings of approximately $80 million from these initiatives, which are anticipated to impact results in the second half of 2025 and into 2026 [6][8][19] - Despite challenges, the Paint Stores Group has outperformed industry volume trends in new residential and commercial segments, suggesting market share gains [6][8][21] Financial Performance - The Paint Stores Group reported low single-digit percentage sales growth, with price mix up mid-single digits and volume down low single digits; 20 net new stores were opened in Q2 2025 [8][21] - Consumer Brands Group experienced sales declines across volume, price mix, and foreign exchange, all down by low single-digit percentages, reflecting ongoing softness in the North American DIY market [6][8][21] - Performance Coatings Group met sales expectations, with volume, acquisitions, and foreign exchange each up low single digits, but faced margin reductions due to increased costs and lack of prior-year asset sale gains [8][24] Cost Management and Capital Expenditures - SG&A expenses increased by 3.8% on an adjusted basis, primarily driven by the Paint Stores Group due to new stores and targeted marketing spend [6][8][43] - Capital expenditure guidance for 2025 was reduced by $170 million (approximately 20%) to $730 million, with a focus on cash preservation amid soft demand [6][8][28] - The company expects raw material costs to remain flat for 2025, with modest deflation in certain materials anticipated in the second half of the year [8][27] Market Outlook - The company anticipates continued turbulence in demand across various segments for the remainder of 2025, leading to a downward revision of full-year sales expectations [6][25][26] - Management believes they are at a major inflection point in the North American architectural coatings industry, emphasizing the importance of maintaining a disciplined strategy to achieve long-term growth [6][19][30] - The company is committed to investing in growth initiatives within the Paint Stores Group while controlling general and administrative spending [6][28][30]

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]