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PPG Reports Third Quarter 2018 Financial Results

PPG (NYSE:PPG) reported third quarter 2018 net sales of about $3.8billion, up 1 percent versus the prior year. Sales volumes were flat versus the prior year in aggregate, with volume growth of about 2 percent offset by lower U.S. architectural coatings volumes due to previously announced customer assortment changes.

Third quarter 2018 net income from continuing operations was $368million, or $1.51 per diluted share. Third quarter 2018 adjusted net income from continuing operations was $353 million, or $1.45 per diluted share. The reported and adjusted effective tax rates for the quarter were approximately 17.5 and 20.5 percent, respectively.

Third quarter 2017 reported and adjusted net income from continuing operations was $393 million, or $1.52 per diluted share. The reported and adjusted effective tax rate for the quarter was about 24 percent.

• Reported net sales of approximately $3.8 billion, up 1 percent versus the prior year and up 3 percent in constant currencies

• Reported earnings per diluted share from continuing operations of $1.51

• Adjusted earnings per diluted share from continuing operations of $1.45

• Continued to implement higher selling prices and execute restructuring actions, which partially offset persistent raw material and elevating logistics cost inflation

• Share repurchases of $250 million in the third quarter and $1.3 billion year to date

• Fourth quarter cash deployment target of $1 billion for acquisitions and share repurchases

“We delivered strong net sales growth in local currencies of more than 3percent,” said Michael McGarry, PPG chairman and chief executive officer. “This growth was driven by higher selling prices and continued strong volume growth from several PPG business units, including aerospace and general industrial coatings. Our selling prices have improved for six consecutive quarters, and we have additional pricing actions underway. In addition, we continue to take aggressive steps to recover our operating margins, including acceleration of restructuring actions and disciplined cost management”.

“As we look ahead, we expect normal business seasonality in the fourth quarter and anticipate overall global economic growth will remain positive. We experienced increasing industrial production volatility and inconsistency in emerging region growth rates as the third quarter progressed, and we expect that to continue. As a result of these economic trends, we expect generally consistent quarterly PPG sales trends sequentially in the fourth quarter. Our fourth quarter earnings per diluted share guidance remains in the range of $1.03 to $1.13,” McGarry said.

“Finally, we continued to deploy cash with nearly $1.3 billion of share repurchases during the first nine months of 2018, including approximately $250 million in the third quarter. Our acquisition pipeline remains active. We expect deployment on acquisitions and share repurchases in the fourth quarter to total approximately $1 billion, which will increase our balance sheet leverage while still providing financial flexibility heading into 2019. We remain focused on executing our strategy, which we believe will drive further shareholder value creation,” McGarry concluded.

Architectural Coatings

Americas and Asia-Pacific organic sales declined a low-single-digit percentage year-over-year, with differences by channel and region. In the U.S. and Canada, same store sales in company-owned architectural stores grew by a high-single-digit percentage.

Aggregate volumes in the national do-it-yourself (DIY) retail accounts and independent dealer channels declined significantly versus the prior year, driven by the unfavorable impact from the previously announced customer assortment changes in the U.S. architectural coatings business. Latin American architectural coatings sales volumes grew by a mid-single-digit percentage led by Mexico. Architectural coatings – EMEA sales volumes declined a low-single-digit percentage, in line with regional demand.

Segment income for the third quarter was $331 million, 9 percent lower than the third quarter 2017, including unfavorable foreign currency translation impact of about $5 million. Segment income decreased due to the impact from lower sales volumes and higher raw material and logistics costs, partially offset by improving selling prices and restructuring-related cost savings.

Industrial Coatings

Third quarter net sales were about $1.5billion, up $42 million, or nearly 3 percent, versus the prior year. Year-over-year sales volumes increased by nearly 2 percent, and selling prices increased by more than 1 percent. Acquisition-related sales were approximately $30 million, an increase of about 2 percent compared to the prior year. Unfavorable foreign currency translation decreased sales by about $40 million, or about 3 percent.

For the complete 3rd quarter report, please go to www.ppg.com.

PPG: We Protect and Beautify the World

At PPG, we work every day to develop and deliver the paints, coatings and materials that our customers have trusted for 135 years. Through dedication and creativity, we solve our customers’ biggest challenges, collaborating closely to find the right path forward. With headquarters in Pittsburgh, we operate and innovate in more than 70countries and reported net sales of $14.7 billion in 2017. We serve customers in construction, consumer products, industrial and transportation markets and aftermarkets. To learn more, visit www.ppg.com.

Source: https://news.ppg.com/press-release/business-unit/ppg-reports-third-quarter-2018-financial-results

Contact Information

PPG Industries, Inc.
PPG Industries, Inc.

One PPG Place
Pittsburgh, PA, 15272

tele: 412-434-3131
http://www.ppg.com/

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