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PPG Industries (PPG) to Post Q3 Earnings: What's in the Cards?
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PPG Industries Inc. (PPG - Free Report) is set to release third-quarter 2022 results after the closing bell on Oct 19. The paint giant’s performance is expected to have been impacted by weak demand in Europe and China, raw material inflation and supply-chain disruptions. However, it is expected to have benefited from acquisitions, pricing actions and restructuring cost savings.
PPG Industries’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of around 10%, on average. The company reported an earnings surprise of around 3.4% in the last reported quarter.
Shares of the company have declined 30% in the past year compared with an 18.2% fall of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
PPG Industries expects its adjusted earnings per share for the third quarter of 2022 to be 5-7% below the bottom end of its guidance range of $1.75-$2.00 that was earlier announced in July 2022.
The Zacks Consensus Estimate for PPG Industries’ revenues in the to-be-reported quarter is pegged at $4,545 million, suggesting a year-over-year rise of around 4%.
The Zacks Consensus Estimate for revenues in the Industrial Coatings unit is currently pegged at $1,788 million, calling for an increase of around 10.8% year over year. The consensus mark for revenues in the Performance Coatings segment is pegged at $2,805 million, indicating a roughly 1.7% year-over-year rise.
Factors at Play
PPG Industries is expected to have faced sustained headwinds from raw material and logistics cost inflation in the third quarter. The company expects raw material cost inflation of mid-teen-percentage in the third quarter on a year-over-year basis. It also expects elevated logistics costs and energy costs in the quarter. The company’s third-quarter performance is expected to have been affected by tightened supply-related disruptions, which are expected to have continued in the quarter. PPG Industries also likely to have faced headwinds from unfavorable currency translation, stemming from a strong appreciation of the U.S. dollar versus many foreign currencies.
PPG Industries’ third-quarter sales are also likely to have been impacted by the weaker demand in Europe and China. The company recently said that its sales were impacted by the further weakening of demand in Europe in comparison with its forecast at the beginning of the third quarter. Demand recovery in China was also lower than expected on a sequential comparison basis due to the resumption of certain pandemic-related restrictions. The declines in sales volume were most pronounced in September.
However, the company’s third-quarter performance is expected to have benefited from cost-cutting and restructuring measures. PPG Industries is executing significant restructuring actions, focusing on regions and end-use markets with the weakest business conditions. The company is also expected to have benefited from its efforts to raise selling prices.
The company is also undertaking measures to grow business inorganically through value-creating acquisitions. Contributions from the acquisitions are expected to get reflected in its September-quarter performance. Tikkurila, Worwag and Cetelon buyouts are likely to have contributed to third-quarter sales.
Our proven model does not conclusively predict an earnings beat for PPG Industries this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for PPG Industries is 0.00%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $1.68. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: PPG Industries currently carries a Zacks Rank #5 (Strong Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for Albemarle’s third-quarter earnings has been revised 9% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.81.
Koppers Holdings Inc. (KOP - Free Report) , expected to release earnings on Nov 3, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
FMC Corporation (FMC - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +0.30%.
The Zacks Consensus Estimate for FMC's earnings for the third quarter is currently pegged at $1.11. FMC currently carries a Zacks Rank #3.
Image: Bigstock
PPG Industries (PPG) to Post Q3 Earnings: What's in the Cards?
PPG Industries Inc. (PPG - Free Report) is set to release third-quarter 2022 results after the closing bell on Oct 19. The paint giant’s performance is expected to have been impacted by weak demand in Europe and China, raw material inflation and supply-chain disruptions. However, it is expected to have benefited from acquisitions, pricing actions and restructuring cost savings.
PPG Industries’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of around 10%, on average. The company reported an earnings surprise of around 3.4% in the last reported quarter.
Shares of the company have declined 30% in the past year compared with an 18.2% fall of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
PPG Industries expects its adjusted earnings per share for the third quarter of 2022 to be 5-7% below the bottom end of its guidance range of $1.75-$2.00 that was earlier announced in July 2022.
The Zacks Consensus Estimate for PPG Industries’ revenues in the to-be-reported quarter is pegged at $4,545 million, suggesting a year-over-year rise of around 4%.
The Zacks Consensus Estimate for revenues in the Industrial Coatings unit is currently pegged at $1,788 million, calling for an increase of around 10.8% year over year. The consensus mark for revenues in the Performance Coatings segment is pegged at $2,805 million, indicating a roughly 1.7% year-over-year rise.
Factors at Play
PPG Industries is expected to have faced sustained headwinds from raw material and logistics cost inflation in the third quarter. The company expects raw material cost inflation of mid-teen-percentage in the third quarter on a year-over-year basis. It also expects elevated logistics costs and energy costs in the quarter. The company’s third-quarter performance is expected to have been affected by tightened supply-related disruptions, which are expected to have continued in the quarter. PPG Industries also likely to have faced headwinds from unfavorable currency translation, stemming from a strong appreciation of the U.S. dollar versus many foreign currencies.
PPG Industries’ third-quarter sales are also likely to have been impacted by the weaker demand in Europe and China. The company recently said that its sales were impacted by the further weakening of demand in Europe in comparison with its forecast at the beginning of the third quarter. Demand recovery in China was also lower than expected on a sequential comparison basis due to the resumption of certain pandemic-related restrictions. The declines in sales volume were most pronounced in September.
However, the company’s third-quarter performance is expected to have benefited from cost-cutting and restructuring measures. PPG Industries is executing significant restructuring actions, focusing on regions and end-use markets with the weakest business conditions. The company is also expected to have benefited from its efforts to raise selling prices.
The company is also undertaking measures to grow business inorganically through value-creating acquisitions. Contributions from the acquisitions are expected to get reflected in its September-quarter performance. Tikkurila, Worwag and Cetelon buyouts are likely to have contributed to third-quarter sales.
PPG Industries, Inc. Price and EPS Surprise
PPG Industries, Inc. price-eps-surprise | PPG Industries, Inc. Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for PPG Industries this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for PPG Industries is 0.00%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $1.68. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: PPG Industries currently carries a Zacks Rank #5 (Strong Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Albemarle Corporation (ALB - Free Report) , scheduled to release earnings on Nov 2, has an Earnings ESP of +8.13% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Albemarle’s third-quarter earnings has been revised 9% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.81.
Koppers Holdings Inc. (KOP - Free Report) , expected to release earnings on Nov 3, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
FMC Corporation (FMC - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +0.30%.
The Zacks Consensus Estimate for FMC's earnings for the third quarter is currently pegged at $1.11. FMC currently carries a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.