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PPG Industries' (PPG) Q4 Earnings and Sales Surpass Estimates
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PPG Industries, Inc. (PPG - Free Report) reported fourth-quarter 2023 profit of $90 million or 38 cents per share, down from $238 million or $1.01 per share in the year-ago quarter.
In the reported quarter, excluding one-time items, adjusted earnings per share (EPS) increased to $1.53 from $1.22 in the year-ago quarter, surpassing the Zacks Consensus Estimate of $1.50.
The company’s revenues were $4,350 million in the quarter, up nearly 4% year over year. The upside can be attributed to higher selling prices. The top line surpassed the Zacks Consensus Estimate of $4,266.5 million.
The aggregate segment margin increased 260 basis points (bps) from the year-ago quarter, representing the fifth consecutive quarter of year-over-year margin growth.
PPG Industries, Inc. Price, Consensus and EPS Surprise
In the fourth quarter, the Performance Coatings segment experienced a 5% year-over-year increase in revenues, reaching $2,615 million, surpassing our estimate of $2,600.8 million. This growth was driven by higher selling prices and favorable foreign currency translation. Higher prices also contributed to a 19% increase in the segment’s income from the previous year’s levels. The improvement in segment operating margins by 150 bps year over year further highlights the positive performance.
Within the Industrial Coatings segment, revenues saw a 2% year-over-year increase to $1,735 million. The metric surpassed our estimate of $1,656 million, primarily supported by favorable foreign currency translation. Segment income rose by $75 million, or 48%, over the prior year’s figure. The upside can be attributed to moderating input costs from historically high levels and enhanced manufacturing performance. The segment's margins demonstrated a substantial improvement, increasing by 420 bps from the fourth quarter of 2022 levels.
FY23 Results
Adjusted earnings for full-year 2023 were $7.67 per share compared with $6.05 a year ago. Net sales increased 3% year over year to $18,246 million.
Financials
At the end of the fourth quarter, the company had almost $1.6 billion in cash and short-term investments. Net debt was $4.5 billion, down nearly $1.2 billion from the prior-year quarter’s figure.
Outlook
For the first quarter of 2024, the company anticipates an adjusted EPS in the band of $1.80-$1.87. For full-year 2024, the company foresees its adjusted EPS to be in the range of $8.34-$8.59.
The effective tax rate for the first quarter of 2024 is projected to be between 24-25%, calling for an increase from the previous year’s figure. This uptick is attributed to various factors, including the impact of heightened regional tax rates and the anticipated distribution of country-specific earnings.
Price Performance
PPG Industries shares have risen 10.6% in the past year compared with the industry’s growth of 16.8% over the same period.
Cameco has a projected earnings growth rate of 156% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 6.7% in the past 60 days. The stock is up around 81.8% in a year.
The consensus estimate for CRS’s current fiscal year earnings is pegged at $3.96, indicating a year-over-year surge of 247.4%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 48.8% in the past year.
ANDE beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 32.8%. The company’s shares have increased 45.3% in the past year.
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PPG Industries' (PPG) Q4 Earnings and Sales Surpass Estimates
PPG Industries, Inc. (PPG - Free Report) reported fourth-quarter 2023 profit of $90 million or 38 cents per share, down from $238 million or $1.01 per share in the year-ago quarter.
In the reported quarter, excluding one-time items, adjusted earnings per share (EPS) increased to $1.53 from $1.22 in the year-ago quarter, surpassing the Zacks Consensus Estimate of $1.50.
The company’s revenues were $4,350 million in the quarter, up nearly 4% year over year. The upside can be attributed to higher selling prices. The top line surpassed the Zacks Consensus Estimate of $4,266.5 million.
The aggregate segment margin increased 260 basis points (bps) from the year-ago quarter, representing the fifth consecutive quarter of year-over-year margin growth.
PPG Industries, Inc. Price, Consensus and EPS Surprise
PPG Industries, Inc. price-consensus-eps-surprise-chart | PPG Industries, Inc. Quote
Segment Review
In the fourth quarter, the Performance Coatings segment experienced a 5% year-over-year increase in revenues, reaching $2,615 million, surpassing our estimate of $2,600.8 million. This growth was driven by higher selling prices and favorable foreign currency translation. Higher prices also contributed to a 19% increase in the segment’s income from the previous year’s levels. The improvement in segment operating margins by 150 bps year over year further highlights the positive performance.
Within the Industrial Coatings segment, revenues saw a 2% year-over-year increase to $1,735 million. The metric surpassed our estimate of $1,656 million, primarily supported by favorable foreign currency translation. Segment income rose by $75 million, or 48%, over the prior year’s figure. The upside can be attributed to moderating input costs from historically high levels and enhanced manufacturing performance. The segment's margins demonstrated a substantial improvement, increasing by 420 bps from the fourth quarter of 2022 levels.
FY23 Results
Adjusted earnings for full-year 2023 were $7.67 per share compared with $6.05 a year ago. Net sales increased 3% year over year to $18,246 million.
Financials
At the end of the fourth quarter, the company had almost $1.6 billion in cash and short-term investments. Net debt was $4.5 billion, down nearly $1.2 billion from the prior-year quarter’s figure.
Outlook
For the first quarter of 2024, the company anticipates an adjusted EPS in the band of $1.80-$1.87. For full-year 2024, the company foresees its adjusted EPS to be in the range of $8.34-$8.59.
The effective tax rate for the first quarter of 2024 is projected to be between 24-25%, calling for an increase from the previous year’s figure. This uptick is attributed to various factors, including the impact of heightened regional tax rates and the anticipated distribution of country-specific earnings.
Price Performance
PPG Industries shares have risen 10.6% in the past year compared with the industry’s growth of 16.8% over the same period.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
PPG currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Cameco Corporation (CCJ - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and The Andersons (ANDE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cameco has a projected earnings growth rate of 156% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 6.7% in the past 60 days. The stock is up around 81.8% in a year.
The consensus estimate for CRS’s current fiscal year earnings is pegged at $3.96, indicating a year-over-year surge of 247.4%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 48.8% in the past year.
ANDE beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 32.8%. The company’s shares have increased 45.3% in the past year.