PPG Industries Q2 Earnings Top Estimates, Sales Lag

PPG Industries, Inc. PPG reported a second-quarter 2024 profit of $528 million or $2.24 per share, up from $490 million or $2.06 per share in the year-ago quarter.

In the second quarter, excluding one-time items, adjusted earnings per share increased to $2.50 from $2.25 in the year-ago quarter, surpassing the Zacks Consensus Estimate of $2.48.

The company's revenues were $4,794 million in the quarter, down 1.6% year over year. The top line missed the Zacks Consensus Estimate of $4,913.5 million.

Segment Review

Performance Coatings' second-quarter revenues were $3,048 million. The segment's net sales were stable, as improved selling prices were offset by the sale of the non-North American portion of the traffic solutions business and adverse foreign currency translation. The figure was below our estimate of $3,101.8 million.

Industrial Coatings generated revenues of $1,746 million, a 4.6% year-over-year decrease. The fall is due to lower selling prices from certain index-based customer contracts and unfavorable foreign currency translation. The figure was below our estimate of $1,831.9 million.

Financials

The company had $1.2 billion in cash and short-term investments as of the end of the quarter. Net debt was $5.2 billion, down $0.4 billion from the prior-year quarter.

Outlook

The company's projected adjusted EPS for the third quarter is in the range of $2.10-$2.20. For the full year, the company expects adjusted EPS in the range of $8.15-$8.30. These projections consider various factors such as current global economic activity, uneven global industrial production, reduced global automotive production, stabilizing demand in Europe, sustained growth in Mexico and India and low single-digit growth in China.

Price Performance

Shares of PPG have lost 12.1% over the past year compared with 12.8% decline of its industry.

Zacks Rank & Upcoming Releases

PPG currently carries a Zacks Rank #4 (Sell).

Some other firms in the basic materials space that are set to release earnings soon are The Scotts Miracle-Gro Company SMG, Ero Copper Corp. ERO and Innospec Inc. IOSP.

Scotts Miracle-Gro is slated to report fiscal third-quarter results on Jul 31. The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.94 per share. SMG beat the Zacks Consensus Estimate in three of the last four quarters, with the average earnings surprise being 1.44%. SMG carries a Zacks Rank #3 (Hold).

Ero Copper is slated to report second-quarter results on Aug 1, after market close. The Zacks Consensus Estimate for ERO's second-quarter earnings is pegged at 27 cents. ERO currently carries a Zacks Rank #1.

Innospec is slated to report second-quarter results on Aug 6, after market close. The consensus estimate for Innospec's second-quarter earnings is pegged at $1.37 per share. IOSP, carrying a Zacks Rank #3, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 8.22%. The company's shares have gained around 24.5% in the past year.

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