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PPG Industries Inc. (PPG - Free Report) reported net earnings from continuing operations of $1.52 per share for the third quarter of 2017, as against the year-ago net loss from continuing operations of 79 cents. The results were in line with the Zacks Consensus Estimate.
Net sales in the quarter increased 3.2% year over year to $3,776 million. Sales beat the Zacks Consensus Estimate of $3,748 million. Favorable currency swings positively affected net sales by around 2%.
PPG Industries, Inc. Price, Consensus and EPS Surprise
Performance Coatings: The segment recorded $2.3 billion in sales and income of $365 million in the quarter. Sales grew 3% year over year. Favorable currency translation increased segment sales by about $45 million or 2%. Acquisition-related sales provided benefits of $25 million.
Segment income fell 1% year over year owing to sustained raw material cost inflation and lower sales volumes related to the natural disasters, partly offset by selling price increases and overhead and manufacturing cost-cutting efforts, including benefits from business restructuring actions. Architectural coatings — America and Asia Pacific sales volumes remained flat year over year. Protective and marine coatings sales volumes were flat year over year on lower U.S. protective coatings sales volumes stemming from the hurricanes.
Industrial Coatings: Sales for the segment were $1.5 billion, up roughly 3% from the prior-year period. Total sales volume rose by more than 3%.
Net income for the segment was $223 million, down 10% year over year. Higher sales volumes and strong cost management, including the benefits from business restructuring actions were more than offset by higher raw material costs, higher logistics costs and reduced selling prices. Favorable currency impact increased segment income by $3 million.
Financial Position
PPG Industries ended the quarter with cash and cash equivalents of $2,287 million, surging 146.2% year over year. Long-term debt rose 9% year over year to $4,089 million.
Outlook
PPG Industries expects continued moderate global economic growth. Post the mayhem caused by the recent natural disasters, the company doesn’t anticipate any further decline in the level of raw material cost inflation for the balance of this year.
The company also sees an additional selling price increase. Along with addressing the inflationary environment, it remains on track with its restructuring program which is expected to deliver full-year savings of more than $45 million.
PPG Industries expects the recent natural disasters to unfavorably impact fourth-quarter earnings by up to 5 cents per share.
Price Performance
PPG Industries has underperformed the industry over the past year. The company’s shares have moved up around 21.9% over this period, compared with roughly 31.1% gain recorded by the industry.
Zacks Rank & Key Picks
PPG Industries currently carries a Zacks Rank #4 (Sell).
FMC has expected long-term earnings growth of 11.3%.
Huntsman has expected long-term earnings growth of 7%.
Air Products has expected long-term earnings growth of 12.1%.
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It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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PPG Industries (PPG) Posts in-Line Q3 Earnings, Sales Beat
PPG Industries Inc. (PPG - Free Report) reported net earnings from continuing operations of $1.52 per share for the third quarter of 2017, as against the year-ago net loss from continuing operations of 79 cents. The results were in line with the Zacks Consensus Estimate.
Net sales in the quarter increased 3.2% year over year to $3,776 million. Sales beat the Zacks Consensus Estimate of $3,748 million. Favorable currency swings positively affected net sales by around 2%.
PPG Industries, Inc. Price, Consensus and EPS Surprise
PPG Industries, Inc. Price, Consensus and EPS Surprise | PPG Industries, Inc. Quote
Segment Review
Performance Coatings: The segment recorded $2.3 billion in sales and income of $365 million in the quarter. Sales grew 3% year over year. Favorable currency translation increased segment sales by about $45 million or 2%. Acquisition-related sales provided benefits of $25 million.
Segment income fell 1% year over year owing to sustained raw material cost inflation and lower sales volumes related to the natural disasters, partly offset by selling price increases and overhead and manufacturing cost-cutting efforts, including benefits from business restructuring actions. Architectural coatings — America and Asia Pacific sales volumes remained flat year over year. Protective and marine coatings sales volumes were flat year over year on lower U.S. protective coatings sales volumes stemming from the hurricanes.
Industrial Coatings: Sales for the segment were $1.5 billion, up roughly 3% from the prior-year period. Total sales volume rose by more than 3%.
Net income for the segment was $223 million, down 10% year over year. Higher sales volumes and strong cost management, including the benefits from business restructuring actions were more than offset by higher raw material costs, higher logistics costs and reduced selling prices. Favorable currency impact increased segment income by $3 million.
Financial Position
PPG Industries ended the quarter with cash and cash equivalents of $2,287 million, surging 146.2% year over year. Long-term debt rose 9% year over year to $4,089 million.
Outlook
PPG Industries expects continued moderate global economic growth. Post the mayhem caused by the recent natural disasters, the company doesn’t anticipate any further decline in the level of raw material cost inflation for the balance of this year.
The company also sees an additional selling price increase. Along with addressing the inflationary environment, it remains on track with its restructuring program which is expected to deliver full-year savings of more than $45 million.
PPG Industries expects the recent natural disasters to unfavorably impact fourth-quarter earnings by up to 5 cents per share.
Price Performance
PPG Industries has underperformed the industry over the past year. The company’s shares have moved up around 21.9% over this period, compared with roughly 31.1% gain recorded by the industry.
Zacks Rank & Key Picks
PPG Industries currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the chemical space are FMC Corp. (FMC - Free Report) , Huntsman Corp. (HUN - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
FMC has expected long-term earnings growth of 11.3%.
Huntsman has expected long-term earnings growth of 7%.
Air Products has expected long-term earnings growth of 12.1%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>