PITTSBURGH - PPG Industries (NYSE:PPG) reported a marginal beat on its second-quarter earnings but failed to meet revenue expectations and provided a weaker-than-expected outlook, sending shares down 3%.
The company posted adjusted earnings per share (EPS) of $2.50, just a cent higher than the analyst consensus of $2.49. However, revenue for the quarter fell short at $4.79 billion, missing the consensus estimate of $4.93 billion.
The paint and coatings manufacturer also indicated that organic sales remained flat compared to the previous year, despite a 110-basis-point improvement in segment margins, marking the seventh consecutive quarter of margin expansion. The company's financial strength was also reflected in its share repurchase program, with approximately $150 million repurchased in the quarter and about $300 million year to date.
PPG's Chairman and CEO, Tim Knavish, commented on the results, highlighting the company's achievement of record reported EPS and adjusted EPS, with an 11% year-over-year growth in adjusted EPS. Knavish attributed the solid financial performance to strong results in various business segments, including aerospace and architectural coatings, despite challenges such as weakening global automotive builds and soft global industrial production.
Looking ahead, PPG's third-quarter guidance anticipates EPS between $2.10 and $2.20, below the analyst consensus of $2.29. The full-year 2024 EPS guidance is projected to be between $8.15 and $8.30, also under the consensus estimate of $8.42. The company's outlook reflects current global economic activity, continued uneven global industrial production, and lower global automotive production, among other factors.
Knavish remains optimistic about the company's momentum in Mexico and the demand for PPG's technology-advantaged products in China, albeit at lower growth rates. He also noted modest sequential improvements expected in Europe and overall improvement in the U.S. as the year progresses.
PPG's balance sheet remains robust, with cash and short-term investments totaling $1.2 billion and a net debt reduction of $0.4 billion from the second quarter of 2023. Corporate expenses were also down $16 million from the previous year, reflecting cost savings initiatives and lower incentive-based compensation, partially offset by general inflation.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.