PPG Industries Inc. (PPG Quick QuotePPG - Free Report) reported net earnings from continuing operations of $347 million or $1.38 per share for first-quarter 2018, up roughly 6% from the year ago figure of $328 million or $1.27. However, adjusted earnings of $1.39 per share missed the Zacks Consensus Estimate of $1.41.

 

Net sales increased 9% year over year to $3,786 million, beating the Zacks Consensus Estimate of $3,730 million. Favorable currency swings positively impacted net sales by 6%.

 

 

 

 

Performance Coatings: The segment recorded $2.2 billion in sales and income of $285 million in the first quarter. Sales grew 7% year over year. Favorable currency translation increased segment sales by nearly 6%.

 

Segment income was in line with the year ago quarter as higher selling prices and lower operating costs were more than offset by increased raw material costs. Architectural coatings — America and Asia Pacific sales volumes increased by low single-digit clip year over year. Protective and marine coatings sales volumes were higher year over year. 

 

Industrial Coatings: Sales at the segment were $1.6 billion, up roughly 10% from the prior-year period. Total sales volume rose by 1.5%. Acquisition-related sales provided benefits of $30 million.

 

Net income at the segment was $240 million, down 13% year over year as elevated raw material inflation more than offset higher selling prices. Favorable currency swings increased segment income by $10 million.

 

 

PPG Industries ended the quarter with cash and cash equivalents of $1,346 million, down 0.2% year over year. Long-term debt rose 36.2% year over year to $5,199 million.

 

 

PPG Industries sees positive momentum in overall economic growth. The company is on track with its restructuring actions that are expected to provide cost savings between $50 million and $55 million in 2018, higher than what it had earlier expected. For 2018, PPG Industries anticipates corporate expenses to be between $175-$190 million.

 

 

PPG Industries has underperformed the industry over the past year. The company’s shares have moved up around 3.5% compared with roughly 15.1% gain recorded by the industry.

 

 

 

 

 

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

 

Some better-ranked stocks in the basic materials space are Kronos Worldwide Inc.(KRO Quick QuoteKRO - Free Report) , Celanese Corporation (CE Quick QuoteCE - Free Report) and Methanex Corporation (MEOH Quick QuoteMEOH - Free Report) .

 

Kronos has an expected long-term earnings growth rate of 5% and sports a Zacks Rank #1 (Strong Buy). The company’s shares have moved up 52.8% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Celanese has an expected long-term earnings growth rate of 8.9% and flaunts a Zacks Rank #1. Its shares have gained 25.8% over a year.

 

Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2 (Buy). Its shares have gained 50.7% over a year.

 

 

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