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PPG Industries (PPG) Q4 Earnings & Revenues Top Estimates
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PPG Industries, Inc. (PPG - Free Report) reported earnings from continuing operations of $1.01 per share in the fourth quarter of 2022, down 9.8% from the prior-year quarter’s earnings of $1.12.
PPG posted adjusted earnings of $1.22 per share, reflecting a decline of 3.2% from the year-ago quarter earnings of $1.26. It, however, surpassed the Zacks Consensus Estimate of $1.14.
The bottom line was aided by a recovery of margins across the segments, with a segment earnings growth of more than 20% on a year-over-year basis, driven by selling price increases. However, severe commercial and supply disruptions in China posed a headwind to PPG in the fourth quarter.
PPG’s net sales in the fourth quarter were $4,185 million, which beat the Zacks Consensus Estimate of $4,056.1 million. Net sales declined around 0.1% from $4,190 million reported in the prior-year quarter. PPG’s top line was driven by higher selling prices, offset by lower overall sales volumes from weak manufacturing activities across most regions. It saw lower sales volume in the Asia-Pacific region due to pandemic-related disruptions in China.
PPG Industries, Inc. Price, Consensus and EPS Surprise
Performance Coatings: Net sales in this segment were $2,490 million in the reported quarter, down 0.7% year over year. Higher selling prices, which supported the sales in this segment, were offset by lower sales volume, the adverse impact of divestitures, the exit of business in Russia and unfavorable foreign currency translation.
The segment reported income of around $272 million, which reflects a rise of 11.9% from prior-year quarter levels. This increase in segment profit was primarily driven by higher selling prices and cost savings from restructuring. However, adverse impact from currencies and elevated manufacturing costs mitigated the positive impact of prices and cost savings.
Industrial Coatings: Net sales from this segment were $1,695 million in the fourth quarter, up 0.7% from the year-ago quarter. Net sales for this segment were driven by higher selling prices across all its business, which were offset by lower sales volumes partly due to weaker industrial activities in China and Europe, the exit of business in Russia and unfavorable foreign currency translations.
Segment income totaled $155 million, up 47.6% year over year. The upside was driven by increased selling prices and cost savings from restructuring but was mitigated by higher raw materials and energy costs, lower sales volume and unfavorable currency.
FY22 Results
Adjusted earnings for full-year 2022 were $6.05 per share compared with $6.77 a year ago. Net sales increased 5% year over year to $17,652 million.
Financials
PPG Industries ended the quarter with cash and cash equivalents of $1,099 million, up 9.4% year over year. The company’s long-term debt was $6,503 million, reflecting a decline of 1%.
Outlook
Moving ahead, the company sees soft economic activity in Europe and China in the first quarter of 2023. However, the company will prioritize supporting customers by providing superior service and products, optimizing inventory levels and executing several cost savings initiatives. It also expects a rebound in demand for its technology-advantaged aerospace products, moderate raw material costs, stable coatings demand in Europe starting in the second quarter and strong economic recovery in China to act as a positive catalyst that will boost earnings.
PPG projects adjusted EPS in the band of $1.10-$1.20 for the first quarter, barring amortization expense of 13 cents and costs related to previously approved and communicated business of 2 cents. It also sees reported EPS for the first quarter between 95 cents and $1.05. The company expects aggregate sales volumes for the quarter to be down a mid-single-digit percentage on a year-over-year basis.
Price Performance
PPG’s shares are down 16.5% over a year against 1.7% rise recorded by its industry.
Nucor’s shares have gained 62% in the past year. The company has a projected earnings growth rate of 21.5% for the current year. NUE topped Zacks Consensus Estimate in all of the last fourth quarters. It delivered a trailing four-quarter earnings surprise of 3.9% on average.
Agnico’s shares have gained 9% in the past year. The Zacks Consensus Estimate for AEM’S earnings has been revised 0.9% upward in the past 60 days.
Agnico Eagle beat Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 26.4% on average.
Franco-Nevada’s shares have gained 11.7% in the past year. The company has a projected earnings growth rate of 4.3% for the current year. Franco-Nevada outpaced Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 1.3% on average.
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PPG Industries (PPG) Q4 Earnings & Revenues Top Estimates
PPG Industries, Inc. (PPG - Free Report) reported earnings from continuing operations of $1.01 per share in the fourth quarter of 2022, down 9.8% from the prior-year quarter’s earnings of $1.12.
PPG posted adjusted earnings of $1.22 per share, reflecting a decline of 3.2% from the year-ago quarter earnings of $1.26. It, however, surpassed the Zacks Consensus Estimate of $1.14.
The bottom line was aided by a recovery of margins across the segments, with a segment earnings growth of more than 20% on a year-over-year basis, driven by selling price increases. However, severe commercial and supply disruptions in China posed a headwind to PPG in the fourth quarter.
PPG’s net sales in the fourth quarter were $4,185 million, which beat the Zacks Consensus Estimate of $4,056.1 million. Net sales declined around 0.1% from $4,190 million reported in the prior-year quarter. PPG’s top line was driven by higher selling prices, offset by lower overall sales volumes from weak manufacturing activities across most regions. It saw lower sales volume in the Asia-Pacific region due to pandemic-related disruptions in China.
PPG Industries, Inc. Price, Consensus and EPS Surprise
PPG Industries, Inc. price-consensus-eps-surprise-chart | PPG Industries, Inc. Quote
Segment Highlights
Performance Coatings: Net sales in this segment were $2,490 million in the reported quarter, down 0.7% year over year. Higher selling prices, which supported the sales in this segment, were offset by lower sales volume, the adverse impact of divestitures, the exit of business in Russia and unfavorable foreign currency translation.
The segment reported income of around $272 million, which reflects a rise of 11.9% from prior-year quarter levels. This increase in segment profit was primarily driven by higher selling prices and cost savings from restructuring. However, adverse impact from currencies and elevated manufacturing costs mitigated the positive impact of prices and cost savings.
Industrial Coatings: Net sales from this segment were $1,695 million in the fourth quarter, up 0.7% from the year-ago quarter. Net sales for this segment were driven by higher selling prices across all its business, which were offset by lower sales volumes partly due to weaker industrial activities in China and Europe, the exit of business in Russia and unfavorable foreign currency translations.
Segment income totaled $155 million, up 47.6% year over year. The upside was driven by increased selling prices and cost savings from restructuring but was mitigated by higher raw materials and energy costs, lower sales volume and unfavorable currency.
FY22 Results
Adjusted earnings for full-year 2022 were $6.05 per share compared with $6.77 a year ago. Net sales increased 5% year over year to $17,652 million.
Financials
PPG Industries ended the quarter with cash and cash equivalents of $1,099 million, up 9.4% year over year. The company’s long-term debt was $6,503 million, reflecting a decline of 1%.
Outlook
Moving ahead, the company sees soft economic activity in Europe and China in the first quarter of 2023. However, the company will prioritize supporting customers by providing superior service and products, optimizing inventory levels and executing several cost savings initiatives. It also expects a rebound in demand for its technology-advantaged aerospace products, moderate raw material costs, stable coatings demand in Europe starting in the second quarter and strong economic recovery in China to act as a positive catalyst that will boost earnings.
PPG projects adjusted EPS in the band of $1.10-$1.20 for the first quarter, barring amortization expense of 13 cents and costs related to previously approved and communicated business of 2 cents. It also sees reported EPS for the first quarter between 95 cents and $1.05. The company expects aggregate sales volumes for the quarter to be down a mid-single-digit percentage on a year-over-year basis.
Price Performance
PPG’s shares are down 16.5% over a year against 1.7% rise recorded by its industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
PPG currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks to consider in the basic materials space include Nucor Corporation (NUE - Free Report) , Agnico Eagle Mines Limited (AEM - Free Report) and Franco-Nevada Corporation (FNV - Free Report) . NUE and AEM both sport a Zacks Rank #1 (Strong Buy), while FNV carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nucor’s shares have gained 62% in the past year. The company has a projected earnings growth rate of 21.5% for the current year. NUE topped Zacks Consensus Estimate in all of the last fourth quarters. It delivered a trailing four-quarter earnings surprise of 3.9% on average.
Agnico’s shares have gained 9% in the past year. The Zacks Consensus Estimate for AEM’S earnings has been revised 0.9% upward in the past 60 days.
Agnico Eagle beat Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 26.4% on average.
Franco-Nevada’s shares have gained 11.7% in the past year. The company has a projected earnings growth rate of 4.3% for the current year. Franco-Nevada outpaced Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 1.3% on average.