PPG reports third quarter results

PPG has reported third quarter 2019 net sales of approximately $3.8bn, comparable with the prior year.

Net sales in constant currencies were about two per cent higher versus the previous year, driven by higher selling prices of 2.6%, and acquisition-related sales, net of divestitures, of more than two per cent.

Aggregate sales volumes were down nearly three per cent versus the prior year. Unfavourable foreign currency translation impacted net sales by approximately two per cent, or about $80m.

Third quarter 2019 reported net income from continuing operations was $366m. Adjusted net income from continuing operations was $396m. Adjusted figures exclude after-tax items of $30m for environmental charges and restructuring-related costs. Third quarter 2018 net income from continuing operations was $368m. Third quarter 2018 adjusted net income from continuing operations was $353m.

For the third quarter 2019, the reported and adjusted effective tax rates were approximately 23% – higher than the third quarter 2018 reported and adjusted effective tax rates of approximately 18% and 21%, respectively.

Michael H. McGarry, PPG chairman and chief executive officer, said, ‘We delivered strong adjusted earnings per share growth of 15% compared to the prior year quarter, as we continue to build momentum and remain focused on operating margin recovery. Strong execution against our cost-savings initiatives and our sixth consecutive quarter with selling price increases of at least two per cent aided in our gross profit improvement, as we continue our efforts to offset the significant raw material cost inflation absorbed in the past few years.

‘Our earnings growth came despite notable weakening in industrial production, which was broad – both geographically and by end-use market – and which more significantly impacted our general industrial and automotive OEM coatings businesses. Consistent with our recent quarterly trends, the aerospace coatings and protective and marine coatings businesses posted strong sales growth.

‘We made excellent progress executing on our key initiatives, including $20 million of cost savings in the third quarter related to previously announced cost savings programs. In addition, we completed the acquisition of Dexmet, a manufacturer of specialty materials for aerospace, automotive and industrial applications. We have completed four acquisitions with combined annual revenues of about $400m that are benefiting our results this year. We continue to generate strong operating cash flow, with year-to-date cash generation improving by about $600m in comparison to last year.’