PPG Industries Inc. (PPG - Free Report) reported adjusted earnings of $1.35 per share for the first quarter of 2017, up 6.3% from the year-ago figure. The result beat the Zacks Consensus Estimate of $1.31.
Adjusted earnings in the reported quarter exclude one-time items including after-tax pension settlement charges of $14 million or 5 cents per share.
Net sales in the quarter inched up 0.7% year over year to $3,569 million. Sales exceeded the Zacks Consensus Estimate of $3,533 million.
Unfavorable currency translation affected sales by 2%. The net effect of portfolio actions contributed less than 1% to total sales. Sales volume increased almost 2% year-over-year.
Segment Review
Performance Coatings: The segment recorded $2.02 billion in sales and income of $285 million in the reported quarter. Sales fell about 1% year over year. Currency translation reduced segment sales by about $45 million or 2%. Acquisition-related sales provided benefits of $10 million.
Segment income rose 2% year over year on the back of cost management initiatives, business-restructuring actions and selling-price increase. Automotive refinish coatings and architectural coatings – America and Asia Pacific sales declined by less than 1%, while the protective and marine coatings sales volumes declined by low-double-digit percentage.
Industrial Coatings: Sales at the segment were $1.47 billion, up almost 7% from the prior-year period. Total sales volume improved by almost 4%.
Net income for the segment was $273 million, up 3% year over year. The growth was largely driven by higher sales volume and lower manufacturing costs, which offset unfavorable currency translations.
Glass Segment: Sales were down 38% at $83 million, mainly due to the divestiture of the European fiber glass business. The company now operates only the North American fiber glass business, where volumes were down by low-single-digit percentage. The segment’s income was $9 million, down from $5 million in the prior-year quarter as a result of the absence of income from the divested European fiber glass business and Asian joint ventures.
Financial Position
PPG Industries ended the quarter with a cash balance of $1,349 million, up 48.4% year over year. Long-term debt fell 9.3% year over year to $3,817 million.
Outlook
PPG Industries expects a modest improvement in global growth, particularly in developed regions and continuing moderated growth rates in emerging regions.
PPG Industries repurchased shares worth $165 million in first quarter of 2017. With the repurchase in the quarter, the company reaffirmed its plans to deploy at least $2.5 billion to $3.5 billion of cash on acquisitions and share repurchases in 2017 and 2018 combined.
PPG Industries’ shares rallied almost 4.8% in the last three months, outperforming the Zacks categorized Chemicals-Diversified industry’s gain of about 3.7%.
Zacks Rank & Key Picks
PPG Industries currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the basic materials space include United States Steel Corporation (X - Free Report) , Kronos Worldwide Inc (KRO - Free Report) and Lundin Mining Corp. (LUNMF - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
U.S. Steel has an expected long-term earnings growth of 8%.
Kronos has an expected long-term earnings growth of 5%.
Lundin has an expected long-term earnings growth of 34.1%.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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PPG Industries Inc. (PPG - Free Report) reported adjusted earnings of $1.35 per share for the first quarter of 2017, up 6.3% from the year-ago figure. The result beat the Zacks Consensus Estimate of $1.31.
Adjusted earnings in the reported quarter exclude one-time items including after-tax pension settlement charges of $14 million or 5 cents per share.
Net sales in the quarter inched up 0.7% year over year to $3,569 million. Sales exceeded the Zacks Consensus Estimate of $3,533 million.
Unfavorable currency translation affected sales by 2%. The net effect of portfolio actions contributed less than 1% to total sales. Sales volume increased almost 2% year-over-year.
Segment Review
Performance Coatings: The segment recorded $2.02 billion in sales and income of $285 million in the reported quarter. Sales fell about 1% year over year. Currency translation reduced segment sales by about $45 million or 2%. Acquisition-related sales provided benefits of $10 million.
Segment income rose 2% year over year on the back of cost management initiatives, business-restructuring actions and selling-price increase. Automotive refinish coatings and architectural coatings – America and Asia Pacific sales declined by less than 1%, while the protective and marine coatings sales volumes declined by low-double-digit percentage.
Industrial Coatings: Sales at the segment were $1.47 billion, up almost 7% from the prior-year period. Total sales volume improved by almost 4%.
Net income for the segment was $273 million, up 3% year over year. The growth was largely driven by higher sales volume and lower manufacturing costs, which offset unfavorable currency translations.
Glass Segment: Sales were down 38% at $83 million, mainly due to the divestiture of the European fiber glass business. The company now operates only the North American fiber glass business, where volumes were down by low-single-digit percentage. The segment’s income was $9 million, down from $5 million in the prior-year quarter as a result of the absence of income from the divested European fiber glass business and Asian joint ventures.
Financial Position
PPG Industries ended the quarter with a cash balance of $1,349 million, up 48.4% year over year. Long-term debt fell 9.3% year over year to $3,817 million.
Outlook
PPG Industries expects a modest improvement in global growth, particularly in developed regions and continuing moderated growth rates in emerging regions.
PPG Industries repurchased shares worth $165 million in first quarter of 2017. With the repurchase in the quarter, the company reaffirmed its plans to deploy at least $2.5 billion to $3.5 billion of cash on acquisitions and share repurchases in 2017 and 2018 combined.
PPG Industries’ shares rallied almost 4.8% in the last three months, outperforming the Zacks categorized Chemicals-Diversified industry’s gain of about 3.7%.
Zacks Rank & Key Picks
PPG Industries currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the basic materials space include United States Steel Corporation (X - Free Report) , Kronos Worldwide Inc (KRO - Free Report) and Lundin Mining Corp. (LUNMF - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
U.S. Steel has an expected long-term earnings growth of 8%.
Kronos has an expected long-term earnings growth of 5%.
Lundin has an expected long-term earnings growth of 34.1%.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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