Axalta Posts Adjusted Earnings of $0.63 per Share as Profit Falls and Stock Drops 3.87%
Key Facts
Axalta Coating Systems reported adjusted diluted earnings of $0.63 per share in the third quarter of 2026, down 6% year over year, while GAAP diluted earnings fell to $0.44 from $0.51 a year earlier. Adjusted earnings missed analysts’ consensus of $0.70 per share, and revenue came in at $1.311 billion versus an estimate of $1.33 billion, according to Investing.com. Net sales were $1.311 billion, up from $1.288 billion in the corresponding period of 2025. After the results were announced, the stock fell 3.87% in premarket trading on October 29, after closing at $34.64 in the October 28 session, according to EL7 data. The results showed diverging trends in sales growth and falling profits, as the company cited volume pressures and operating costs among the drivers of performance.
Adjusted EBITDA was $282 million, down 4% from the year-earlier period, with a margin of 21.5%. CEO Chris Villavarayan said Axalta maintained a margin above 20%, strengthened its balance sheet and posted record quarterly sales in its Mobility Coatings segment. The company attributed sales growth to higher volumes in 3 of 4 regions, foreign currency translation effects, acquisition contributions and an improved price mix. Lower volumes, particularly in Europe, constrained growth. Free cash flow was $92 million, up 3% year over year, and included about $21 million in additional cash costs related to mergers and acquisitions during the quarter.
Mobility Coatings posted record quarterly sales of $493 million, up 7% year over year, while commercial vehicle sales rose 24% to $119 million. By contrast, Performance Coatings sales fell to $818 million, down $10 million from a year earlier. Adjusted EBITDA in the segment declined to $188 million from $211 million in the third quarter of 2025. The divergence highlights differing performance across the company’s units during the quarter, with Mobility Coatings recording a sales record as sales and earnings declined in the high-performance coatings segment. Axalta maintained an overall adjusted earnings margin above 20%, according to its CEO.
Axalta expects fourth-quarter sales to be roughly flat compared with the same period a year earlier, and adjusted diluted earnings of about $0.55 per share. That outlook is below analysts’ estimate of $0.65 per share, according to Investing.com. For fiscal 2026, the company expects adjusted diluted earnings of about $2.45 per share. It also targets free cash flow of about $450 million for the year, including about $80 million in cash costs related to mergers and acquisitions. These forecasts remain central to assessing the results, following a decline in adjusted earnings in the third quarter despite higher net sales.
The company is continuing to pursue its proposed merger with AkzoNobel and said it sees significant opportunity to create value from the deal. Shareholders of both companies voted in favor of all merger-related resolutions at meetings held on August 5, 2026. Axalta listed strengthening its balance sheet among its quarterly achievements, alongside record sales in Mobility Coatings. This comes as the company prepares to close out the year in line with its fourth-quarter and fiscal-year outlook. Sales, profitability and cash flow will be among the indicators reflected in the company’s upcoming results.