We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is PPG Industries (PPG) Down 1.6% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for PPG Industries (PPG - Free Report) . Shares have lost about 1.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is PPG Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
PPG Industries Tops Q3 Earnings and Revenue Estimates
PPG Industries logged net income from continuing operations of $344 million or $1.43 per share in third-quarter 2021, down from the year-ago quarter’s profit of $442 million or $1.86 per share.
Barring one-time items, adjusted earnings were $1.69 per share in the reported quarter, down from $2.03 logged in the year-ago quarter. However, the figure topped the Zacks Consensus Estimate of $1.56.
Net sales rose roughly 19% year over year to $4,372 million. The figure beat the Zacks Consensus Estimate of $4,241.5 million. Selling prices increased 6%, while sales volumes fell 2%.
The company benefited from higher year-over-year sales in the Industrial Coatings segment in the quarter, led by selling price increases. It also witnessed strength in the Performance coatings business.
Segment Highlights
Performance Coatings: Net sales in the segment were around $2.8 billion in the third quarter, up around 23% year over year. Sales volume in the segment inched down around 1%. Selling prices rose 5%.
Segment income declined roughly 4% year over year to $408 million. The downside can be attributed to the impact of raw material cost inflation and lower sales volumes, partly offset by higher selling prices, acquisition-related earnings and restructuring cost savings.
Industrial Coatings: Sales in the segment totaled around $1.6 billion, up around 13% from the prior-year quarter’s figure. Sales volumes declined 4% year over year and selling prices were up 7% year over year.
Net income in the segment totaled $140 million, down around 45% year over year. It was lower than the previous year’s levels primarily due to raw material cost inflation and reduced automotive OEM coatings sales volumes. The downside was partly offset by higher selling prices and restructuring cost savings.
Financials
PPG Industries ended the third quarter with cash and cash equivalents of $1,216 million, down roughly 39.4% year over year. Long-term debt rose around 26.2% year over year to $6,092 million.
Moreover, PPG Industries delivered around $35 million of cost savings from business restructuring programs in the reported quarter. The company forecasts full-year 2021 cost savings of $135 million.
Outlook
The company expects ongoing supply chain disruptions to continue throughout the fourth quarter, with potential additional impacts from the recent industrial production curtailments in China. It forecasts these disruptions to ease modestly in overall quantity and magnitude as the quarter progresses.
It will continue to prioritize further selling price increases and expects price realization to fully offset raw material cost inflation in early 2022.
Moreover, the recovery of the automotive original equipment manufacturer (OEM), aerospace, and automotive refinish coatings businesses will be a key catalyst for growth in 2022. It will continue to aggressively manage all aspects of its cost structure, the company noted.
PPG Industries also expects net sales volumes to be down 8-10% year over year in the fourth quarter. Corporate expenses are projected to be $50-55 million in the fourth quarter. Net interest expenses are expected between $25 million and $27 million.
The company also sees adjusted earnings for the full year to be $6.67-$6.73 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -21.36% due to these changes.
VGM Scores
Currently, PPG Industries has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, PPG Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is PPG Industries (PPG) Down 1.6% Since Last Earnings Report?
A month has gone by since the last earnings report for PPG Industries (PPG - Free Report) . Shares have lost about 1.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is PPG Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
PPG Industries Tops Q3 Earnings and Revenue Estimates
PPG Industries logged net income from continuing operations of $344 million or $1.43 per share in third-quarter 2021, down from the year-ago quarter’s profit of $442 million or $1.86 per share.
Barring one-time items, adjusted earnings were $1.69 per share in the reported quarter, down from $2.03 logged in the year-ago quarter. However, the figure topped the Zacks Consensus Estimate of $1.56.
Net sales rose roughly 19% year over year to $4,372 million. The figure beat the Zacks Consensus Estimate of $4,241.5 million. Selling prices increased 6%, while sales volumes fell 2%.
The company benefited from higher year-over-year sales in the Industrial Coatings segment in the quarter, led by selling price increases. It also witnessed strength in the Performance coatings business.
Segment Highlights
Performance Coatings: Net sales in the segment were around $2.8 billion in the third quarter, up around 23% year over year. Sales volume in the segment inched down around 1%. Selling prices rose 5%.
Segment income declined roughly 4% year over year to $408 million. The downside can be attributed to the impact of raw material cost inflation and lower sales volumes, partly offset by higher selling prices, acquisition-related earnings and restructuring cost savings.
Industrial Coatings: Sales in the segment totaled around $1.6 billion, up around 13% from the prior-year quarter’s figure. Sales volumes declined 4% year over year and selling prices were up 7% year over year.
Net income in the segment totaled $140 million, down around 45% year over year. It was lower than the previous year’s levels primarily due to raw material cost inflation and reduced automotive OEM coatings sales volumes. The downside was partly offset by higher selling prices and restructuring cost savings.
Financials
PPG Industries ended the third quarter with cash and cash equivalents of $1,216 million, down roughly 39.4% year over year. Long-term debt rose around 26.2% year over year to $6,092 million.
Moreover, PPG Industries delivered around $35 million of cost savings from business restructuring programs in the reported quarter. The company forecasts full-year 2021 cost savings of $135 million.
Outlook
The company expects ongoing supply chain disruptions to continue throughout the fourth quarter, with potential additional impacts from the recent industrial production curtailments in China. It forecasts these disruptions to ease modestly in overall quantity and magnitude as the quarter progresses.
It will continue to prioritize further selling price increases and expects price realization to fully offset raw material cost inflation in early 2022.
Moreover, the recovery of the automotive original equipment manufacturer (OEM), aerospace, and automotive refinish coatings businesses will be a key catalyst for growth in 2022. It will continue to aggressively manage all aspects of its cost structure, the company noted.
PPG Industries also expects net sales volumes to be down 8-10% year over year in the fourth quarter. Corporate expenses are projected to be $50-55 million in the fourth quarter. Net interest expenses are expected between $25 million and $27 million.
The company also sees adjusted earnings for the full year to be $6.67-$6.73 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -21.36% due to these changes.
VGM Scores
Currently, PPG Industries has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, PPG Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.