PPG Industries (PPG) Q2 2024 earnings summary

Executive summary

• Achieved $4.8 billion in Q2 2024 sales, with adjusted EPS of $2.50, up 11% year-over-year, and record segment margins for the seventh consecutive quarter.

• Organic sales were flat year-over-year, with strong growth in Mexico, China, and India, but weaker demand in Europe and global auto OEM.

• Net income attributable to shareholders was $528 million, up from $490 million in Q2 2023.

• Strategic reviews of Architectural Coatings U.S. & Canada and global silica product business are progressing, with multiple interested parties.

• Share repurchases totaled $150 million in Q2 and $300 million year-to-date.

Financial highlights

• Gross margin reached 43%, up 180 basis points year-over-year; segment margin at 17.3%, up 110 basis points.

• Performance Coatings margin hit a record 18.7%; Industrial Coatings margin improved to 14.8%, up 110–120 basis points.

• Operating working capital as a percent of sales was 17.0% at June 30, 2024.

• Cash and short-term investments totaled $1.2 billion at quarter end; net debt was $5.2 billion.

• Dividend per share increased to $0.68, with $305 million paid in the first half of 2024.

Outlook and guidance

• Q3 2024 organic sales expected to be flat to low single-digit growth; adjusted EPS guidance of $2.10–$2.20.

• Full-year 2024 organic sales projected flat to low single-digit growth; adjusted EPS guidance of $8.15–$8.30.

• Raw material costs expected to be flat to down low single digits for the year; wage inflation remains elevated.

• Effective tax rate for Q3 2024 expected at 23.5%–24.5%, higher than prior year.

• Continued focus on margin improvement through volume leverage, productivity, and cost control.