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PPG Industries Inc. (PPG - Free Report) reported net earnings from continuing operations of $184 million or 72 cents per share for fourth-quarter 2017, a roughly two-fold increase from the year ago figure of $91 million or 34 cents. However, adjusted earnings were $1.19 per share that surpassed the Zacks Consensus Estimate of $1.18.
Net sales increased 7.8% year over year to $3,682 million, beating the Zacks Consensus Estimate of $3,605 million. Favorable currency swings positively impacted net sales by more than 3%.
FY17 Results
For full-year 2017, the company posted profits from continuing operations of $1.4 billion, or $5.46 per share, up from $547 million, or $2.05 per share, reported in 2016. Adjusted earnings for the year came in at $5.87 per share, up 3.5% from $5.67 reported a year ago.
PPG Industries reported revenues of $14.8 billion in 2017, up around 3.4% from $14.3 billion reported in 2016. While favorable foreign currency translation positively impacted sales by less than 1% and acquisitions related sales improved more than 1%.
PPG Industries, Inc. Price, Consensus and EPS Surprise
Performance Coatings: The segment recorded $2.1 billion in sales and income of $260 million in the fourth quarter. Sales grew 7.3% year over year. Favorable currency translation increased segment sales by more than 3%.
Segment income rose 8.8% year over year driven by the impact of increased sales volumes, overhead and manufacturing cost management and better selling prices, partly offset by significant raw material inflation. Architectural coatings — America and Asia Pacific sales volumes increased by low single-digit clip year over year. Protective and marine coatings sales volumes were flat year over year
Industrial Coatings: Sales at the segment were $1.6 billion, up roughly 8.4% from the prior-year period. Total sales volume rose by more than 4%. Acquisition-related sales provided benefits of $27 million.
Net income at the segment was $212 million, down 10.2% year over year as cost improvements and strong sales volume gains was offset by significant raw material inflation and slightly reduced selling price. Favorable currency swings increased segment income by $6 million.
Financial Position
PPG Industries ended 2017 with cash and cash equivalents of $1,436 million, down 21.1% year over year. Long-term debt rose 9.2% year over year to $4,134 million.
Outlook
PPG Industries anticipates additional selling price increases this year. The company is committed towards deploying at least $2.4 billion of cash in 2018 backed by acquisitions and share repurchases as part of its earlier communicated goal of deploying $3.5 billion in 2017 and 2018 combined. The company expects its effective tax rate to be in the range of 23-24% for 2018.
Price Performance
PPG Industries has underperformed the industry over the past year. The company’s shares have moved up around 17.4% compared with roughly 29.2% gain recorded by the industry.
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PPG Industries (PPG) Beats Q4 Earnings & Sales Estimates
PPG Industries, Inc. Price, Consensus and EPS Surprise
PPG Industries, Inc. Price, Consensus and EPS Surprise | PPG Industries, Inc. Quote
Segment Review
Performance Coatings: The segment recorded $2.1 billion in sales and income of $260 million in the fourth quarter. Sales grew 7.3% year over year. Favorable currency translation increased segment sales by more than 3%.
Segment income rose 8.8% year over year driven by the impact of increased sales volumes, overhead and manufacturing cost management and better selling prices, partly offset by significant raw material inflation. Architectural coatings — America and Asia Pacific sales volumes increased by low single-digit clip year over year. Protective and marine coatings sales volumes were flat year over year
Industrial Coatings: Sales at the segment were $1.6 billion, up roughly 8.4% from the prior-year period. Total sales volume rose by more than 4%. Acquisition-related sales provided benefits of $27 million.
Net income at the segment was $212 million, down 10.2% year over year as cost improvements and strong sales volume gains was offset by significant raw material inflation and slightly reduced selling price. Favorable currency swings increased segment income by $6 million.
Financial Position
PPG Industries ended 2017 with cash and cash equivalents of $1,436 million, down 21.1% year over year. Long-term debt rose 9.2% year over year to $4,134 million.
Outlook
PPG Industries anticipates additional selling price increases this year. The company is committed towards deploying at least $2.4 billion of cash in 2018 backed by acquisitions and share repurchases as part of its earlier communicated goal of deploying $3.5 billion in 2017 and 2018 combined. The company expects its effective tax rate to be in the range of 23-24% for 2018.
Price Performance
PPG Industries has underperformed the industry over the past year. The company’s shares have moved up around 17.4% compared with roughly 29.2% gain recorded by the industry.