It has been about a month since the last earnings report for PPG Industries (PPG) . Shares have added about 5.5% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is PPG Industries due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for PPG Industries, Inc. before we dive into how investors and analysts have reacted as of late.PPG Industrie ...

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]

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]

Financial Performance - The company reported net sales of $4.2 billion, with a 2% increase in organic sales, driven by aerospace coatings, protective and marine coatings, and packaging coatings [8][9] - The quarterly segment EBITDA margin was 20.3%, and adjusted earnings per diluted share were $2.22 [9] - The company repurchased approximately $150 million of stock during the quarter, totaling $540 million year-to-date, and raised its quarterly dividend per share by 4% [9][19] Business Segment Performance - In the Global Architectural Coatings segment, positive selling prices were offset by lower volumes and the impact of a divestiture, with organic sales growth in the Nordic region and the UK, but lower demand in Eastern Europe [10][11] - The Performance Coatings segment saw a 6% increase in organic sales, with aerospace delivering high single-digit percentage organic sales growth [11][12] - Protective and Marine Coatings achieved double-digit percentage organic sales growth, marking the ninth consecutive quarter of positive year-over-year sales volume growth [13][14] - The Industrial Coatings segment's sales volumes were flat, with selling prices declining by 1% due to index-based customer contracts [15][16] Market Performance - Organic growth was delivered in both the United States and Latin America, while demand in Europe was tepid and some softening was noted in Asia [9][10] - The company expects project-related spending in Mexico to improve in the second half of the year, with organic growth in Mexico projected to be modestly up to mid-single digits [10][90] Company Strategy and Industry Competition - The company is focused on leveraging its technology advantage in the Performance Coatings segment, particularly in aerospace and protective and marine coatings [21][22] - The company anticipates continued growth in the aerospace sector, with high single-digit to double-digit growth expected for the foreseeable future [80] - The company is committed to driving shareholder value through disciplined capital allocation and a strong balance sheet [20][23] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the dynamic macro environment, with expectations for sales and earnings growth momentum in the second half of the year [20][22] - The company is monitoring tariff situations and plans to react accordingly with pricing actions to mitigate financial impacts [20][21] - Management expects to achieve a mid-single-digit percentage increase in EPS for the third quarter and a low double-digit percentage increase for the fourth quarter [22] Other Important Information - The company retired €300 million of debt during the quarter and has another €600 million of euro debt maturing in the fourth quarter [19][20] - The company is investing in both operational and capital expenditures in aerospace to support future growth [11][80] Q&A Session Summary Question: Global Architectural Coatings segment performance - Management noted that Eastern Europe did not recover as expected, impacting margins, while Mexico showed signs of retail recovery [28][30] Question: Volume growth expectations for Q3 and Q4 - Management expects low single-digit growth in volumes for the second half of the year, with confidence in share gains [33][34] Question: Outlook for Performance Coatings and Refinish - Refinish is expected to be soft in Q3, with a return to normalization in Q4, while Protective and Marine Coatings are anticipated to continue strong growth [36][38] Question: Raw material inflation compared to peers - Management explained that raw material inflation is influenced by the company's significant purchases in Mexico and specific material costs like epoxy [44][45] Question: Buyback activity and M&A considerations - Management confirmed ongoing buyback activity and indicated that any M&A would be small and not materially affect cash allocation [47][50] Question: Share gains and margin impacts - Management indicated that share gains would improve net margins through fixed cost leverage and manufacturing efficiencies [77] Question: Aerospace growth outlook - Management anticipates high single-digit to double-digit growth in aerospace, supported by strong forecasts from industry CEOs [80] Question: Mexico architectural market outlook - Management expressed confidence in project spending recovery in Mexico, with expectations for modest growth in the second half of the year [88][90]

Core Insights - PPG Industries reported revenue of $4.2 billion for the quarter ended June 2025, reflecting a 12.5% decline year-over-year, with EPS at $2.22 compared to $2.50 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $4.13 billion by 1.53%, while the EPS met the consensus estimate [1] Financial Performance - Net Sales in Performance Coatings were $1.51 billion, surpassing the average estimate of $1.48 billion, but showing a significant year-over-year decline of 50.4% [4] - Global Architectural Coatings reported Net Sales of $1.02 billion, slightly below the average estimate of $1.03 billion [4] - Industrial Coatings achieved Net Sales of $1.67 billion, exceeding the average estimate of $1.64 billion, with a year-over-year decline of 4.6% [4] Segment Income - Segment Income for Performance Coatings was $356 million, higher than the estimated $327.83 million [4] - Global Architectural Coatings had Segment Income of $160 million, below the estimated $184.59 million [4] - Industrial Coatings reported Segment Income of $227 million, slightly above the average estimate of $219.24 million [4] Stock Performance - PPG Industries' shares returned +0.2% over the past month, compared to a +3.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Group 1 - Kennametal Inc. announced the election of Shelley Bausch to its Board of Directors, effective May 1, 2025, replacing Cindy L. Davis, who will retire on September 1, 2025 [1] - Shelley Bausch has over 30 years of experience in leading global manufacturing businesses, with a strong track record in driving growth and transforming businesses [3] - Bausch previously served as President of Global Industrial Coatings at Axalta, where she led various industrial coatings businesses and expanded into new markets [2][4] Group 2 - William M. Lambert, Chairman of Kennametal's Board, expressed confidence in Bausch's ability to contribute to the company's strategy and shareholder value [3] - Sanjay Chowbey, President & CEO of Kennametal, highlighted Bausch's expertise in operational excellence, strategic execution, and P&L leadership [3] - Kennametal has over 85 years of experience in industrial technology, generating $2 billion in revenues in fiscal 2024, and employs approximately 8,400 people globally [8]

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].