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PPG Industries (PPG) to Report Q4 Earnings: What's in Store?
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PPG Industries, Inc. (PPG - Free Report) is scheduled to report fourth-quarter 2022 results after the closing bell on Jan 19.
The company surpassed Zacks Consensus Estimate for earnings in three of the last four quarters while missing it once. It delivered a trailing four-quarter earnings surprise of around 7.8% on average. It posted a negative earnings surprise of 0.6% in the last reported quarter.
The company is expected to have faced demand headwinds in Europe and China, raw material cost inflation and supply-chain disruptions in the fourth quarter. However, a recovery in the automotive OEM and aerospace coatings business, pricing actions and restructuring cost savings might have supported its margins in the fourth quarter.
PPG Industries shares are down 19.2% over the past year against 0.2% rise recorded by its industry.
Image Source: Zacks Investment Research
Zacks Model
Our proven model predicts 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.
Earnings Beat: Earnings ESP for PPG Industries is +0.38%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at $1.15. 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 #3.
What Do the Estimates Say?
The Zacks Consensus Estimate for sales for to-be reported quarter is currently pegged at $4,056 million which implies a decline of 3.2% from the year-ago reported number.
The Zacks Consensus Estimate for net sales for PPG’s Industrial Coatings segment is pegged at $1,654 million which indicates a year-over-year decline of 1.7%. Also, the consensus estimate for net sales for PPG’s Performance Coatings segment stands at $2,373 million, which suggests a year-over-year decrease of 5.3%.
Some Factors to Watch
A recovery in the automotive OEM and aerospace coatings and stable demand in automotive refinish and traffic solutions businesses are likely to have aided the company’s performance in the fourth quarter.
PPG Industries is expected to have benefited from its actions to raise selling prices in an effort to counter inflation. Moreover, the company is taking additional cost reduction actions amounting to roughly $70 million, some benefits of which are expected in the fourth quarter.
PPG is also expected to have seen lower working capital in the fourth quarter compared than the previous quarter as it is likely to have benefited from inventory reductions, leading to cash generation in the quarter to be reported.
However, the company is expected to have faced headwinds from higher raw material, energy and logistics costs in the fourth-quarter which might have dented in its margins. PPG expects raw material cost inflation of mid-single digit percentage in the fourth quarter. Tightened supply and pandemic-related shut downs in China are expected to have adversely impacted its performance in the fourth quarter. Demand weakness in Europe and China is likely to have continued in fourth quarter due to weaker industrial productions, hurting PPG’s sales volumes. The company expects total sales volume to be in mid-single digit percentage on a year-over-year basis in the quarter.
PPG Industries is also likely to have faced headwinds from unfavorable currency translation in the quarter to be reported, stemming from a strong appreciation of the U.S. dollar versus many foreign currencies.
Here are some other companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post earnings beat this quarter:
The Zacks Consensus Estimate for Agnico’s fourth-quarter earnings has been revised 2.5% upward in the past 60 days. The consensus estimate for AEM’s earnings for fourth quarter is currently pegged at 41 cents.
Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , which is expected to release its earnings on Mar 1, has an Earnings ESP of +12.11%.
The Zacks Consensus Estimate for Sociedad’s fourth-quarter earnings has been revised 7% upward in the past 60 days. The consensus estimate for SQM’s earnings for the quarter is currently pegged at $3.80. It currently carries a Zacks Rank #2.
FMC Corporation (FMC - Free Report) which is scheduled to release earnings on Feb 7, has an Earnings ESP of +0.94% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for earnings for FMC for the fourth-quarter is pegged at $2.32.
Image: Bigstock
PPG Industries (PPG) to Report Q4 Earnings: What's in Store?
PPG Industries, Inc. (PPG - Free Report) is scheduled to report fourth-quarter 2022 results after the closing bell on Jan 19.
The company surpassed Zacks Consensus Estimate for earnings in three of the last four quarters while missing it once. It delivered a trailing four-quarter earnings surprise of around 7.8% on average. It posted a negative earnings surprise of 0.6% in the last reported quarter.
The company is expected to have faced demand headwinds in Europe and China, raw material cost inflation and supply-chain disruptions in the fourth quarter. However, a recovery in the automotive OEM and aerospace coatings business, pricing actions and restructuring cost savings might have supported its margins in the fourth quarter.
PPG Industries shares are down 19.2% over the past year against 0.2% rise recorded by its industry.
Image Source: Zacks Investment Research
Zacks Model
Our proven model predicts 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.
Earnings Beat: Earnings ESP for PPG Industries is +0.38%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at $1.15. 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 #3.
What Do the Estimates Say?
The Zacks Consensus Estimate for sales for to-be reported quarter is currently pegged at $4,056 million which implies a decline of 3.2% from the year-ago reported number.
The Zacks Consensus Estimate for net sales for PPG’s Industrial Coatings segment is pegged at $1,654 million which indicates a year-over-year decline of 1.7%. Also, the consensus estimate for net sales for PPG’s Performance Coatings segment stands at $2,373 million, which suggests a year-over-year decrease of 5.3%.
Some Factors to Watch
A recovery in the automotive OEM and aerospace coatings and stable demand in automotive refinish and traffic solutions businesses are likely to have aided the company’s performance in the fourth quarter.
PPG Industries is expected to have benefited from its actions to raise selling prices in an effort to counter inflation. Moreover, the company is taking additional cost reduction actions amounting to roughly $70 million, some benefits of which are expected in the fourth quarter.
PPG is also expected to have seen lower working capital in the fourth quarter compared than the previous quarter as it is likely to have benefited from inventory reductions, leading to cash generation in the quarter to be reported.
However, the company is expected to have faced headwinds from higher raw material, energy and logistics costs in the fourth-quarter which might have dented in its margins. PPG expects raw material cost inflation of mid-single digit percentage in the fourth quarter. Tightened supply and pandemic-related shut downs in China are expected to have adversely impacted its performance in the fourth quarter. Demand weakness in Europe and China is likely to have continued in fourth quarter due to weaker industrial productions, hurting PPG’s sales volumes. The company expects total sales volume to be in mid-single digit percentage on a year-over-year basis in the quarter.
PPG Industries is also likely to have faced headwinds from unfavorable currency translation in the quarter to be reported, stemming from a strong appreciation of the U.S. dollar versus many foreign currencies.
PPG Industries, Inc. Price and EPS Surprise
PPG Industries, Inc. price-eps-surprise | PPG Industries, Inc. Quote
Other Stocks That Warrant a Look
Here are some other companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post earnings beat this quarter:
Agnico Eagle Mines Limited (AEM - Free Report) , which is expected to release earnings on Feb 22, has an Earnings ESP of +5.74% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Agnico’s fourth-quarter earnings has been revised 2.5% upward in the past 60 days. The consensus estimate for AEM’s earnings for fourth quarter is currently pegged at 41 cents.
Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , which is expected to release its earnings on Mar 1, has an Earnings ESP of +12.11%.
The Zacks Consensus Estimate for Sociedad’s fourth-quarter earnings has been revised 7% upward in the past 60 days. The consensus estimate for SQM’s earnings for the quarter is currently pegged at $3.80. It currently carries a Zacks Rank #2.
FMC Corporation (FMC - Free Report) which is scheduled to release earnings on Feb 7, has an Earnings ESP of +0.94% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for earnings for FMC for the fourth-quarter is pegged at $2.32.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.