PPG Industries (PPG) Q3 2024 earnings summary

Executive summary

• Achieved record adjusted EPS of $2.13, up 3% year-over-year, and reported EPS of $2.00, with Q3 2024 net sales of $4.6 billion, flat to down 1.5% year-over-year due to currency and divestitures.

• Eighth consecutive quarter of segment margin improvement, with total segment margin at 15.6%, up 60 basis points year-over-year.

• Strong organic growth in aerospace, automotive refinish, and architectural coatings in the Americas and Asia Pacific; Europe remained flat or weak, and industrial production was soft.

• Announced definitive agreements to divest the silicas products business ($310 million) and U.S./Canada architectural coatings business ($550 million).

• Share repurchases totaled $200 million in the quarter and $500 million year to date; dividend increased by 5%.

Financial highlights

• Adjusted net income for Q3 2024 was $500 million, with net income at $468 million; operating cash flow for nine months was $1.1 billion.

• Performance Coatings segment saw 1–2% year-over-year sales growth and double-digit organic growth in aerospace and automotive refinish.

• Industrial Coatings segment sales declined 6% year-over-year, with segment income down 19% due to weak auto OEM and industrial production.

• Ended Q3 with $1.3 billion in cash and net debt of $5.2 billion.

• Dividend per share for nine months was $1.98, up from $1.89 in 2023.

Outlook and guidance

• Full-year 2024 organic sales expected to be flat; adjusted EPS projected at the low end of $8.15–$8.30 per share.

• Expect to close silicas and architectural coatings transactions in Q4 2024 or early 2025.

• Restructuring program to deliver $175 million in annualized pre-tax savings, with $60 million expected in 2025.

• Raw material costs expected to remain flat or decline low single digits in Q4; capital expenditures forecasted at $650–$700 million.

• Optimistic for 2025, anticipating a higher-margin, higher-growth portfolio supported by self-help initiatives.