PPG posts record adjusted earnings of $2.25 per share and raises annual outlook
Key Facts
PPG reported third-quarter results on October 27 that included record adjusted earnings of $2.25 per share and sales of $4.4 billion, exceeding analysts’ estimates. Earnings per share topped the $2.13 consensus by $0.12, while sales beat the $4.28 billion estimate, according to Investing.com. The company raised its full-year adjusted earnings-per-share guidance range to $7.90–$8.10, with a midpoint of $8.00. The new midpoint is above analysts’ consensus of $7.88. The results showed organic sales growth alongside the higher outlook, while the stock rose 7.55% in extended trading after the announcement.
Organic sales grew 5% year over year in the third quarter, and Chief Executive Tim Knavish said that marked the seventh consecutive quarter of growth. The run reflects continued organic sales expansion through the third quarter, while comparisons with analysts’ estimates showed a beat on revenue and adjusted earnings per share. The guidance the company issued in July projected low- to mid-single-digit organic growth for the third quarter, according to information included in its quarterly results. Its fourth-quarter guidance now projects low-single-digit organic growth. The company thus moved from its July projection for the third quarter to a specific outlook for the following quarter after reporting actual results.
Among the drivers it named for the fourth quarter, PPG expected aerospace, architectural coatings in Latin America and packaging coatings to lead organic sales growth. The company set a low-single-digit growth outlook for the quarter without providing a more precise figure in its guidance. That projection follows 5% organic growth in the third quarter, the company’s seventh consecutive quarter of such growth. PPG also raised the midpoint of its full-year adjusted earnings-per-share guidance to $8.00, above analysts’ consensus of $7.88. The new annual range is $7.90–$8.10 per share, according to Investing.com.
Against the backdrop of U.S. industrial activity, new orders for durable goods rose 1.8% to $345.4 billion in September, following a revised 0.1% increase in August, according to the U.S. Census Bureau. Orders excluding transportation equipment rose 0.5%, while those excluding defense equipment increased 2.2%. Transportation equipment led the increase, with orders rising 4.6% to $119.8 billion in September. The durable-goods orders report was released on the day PPG announced its results, placing it among the economic data published that day. The next advance report on durable goods, covering October data, is scheduled for November 25.
PPG shares closed at $109.90 on October 26, before the results were announced, according to EL7 data. After the figures were released the following day, the stock rose 7.55% in extended trading, according to Investing.com. The move coincided with results that beat analysts’ estimates, record adjusted earnings per share and a higher midpoint for the annual earnings outlook. The durable-goods data published on October 27 provide broader context for U.S. industrial activity but do not determine the performance of the company’s business. The next economic milestone in this context is the October report scheduled for November 25.