PPG Industries (PPG) Beats Q4 Earnings & Sales Estimates

PPG Industries, Inc. Price, Consensus and EPS Surprise | PPG Industries, Inc. Quote

Segment Review

Performance Coatings: The segment recorded $2.1 billion in sales and income of $260 million in the fourth quarter. Sales grew 7.3% year over year. Favorable currency translation increased segment sales by more than 3%.

Segment income rose 8.8% year over year driven by the impact of increased sales volumes, overhead and manufacturing cost management and better selling prices, partly offset by significant raw material inflation. Architectural coatings — America and Asia Pacific sales volumes increased by low single-digit clip year over year. Protective and marine coatings sales volumes were flat year over year

Industrial Coatings: Sales at the segment were $1.6 billion, up roughly 8.4% from the prior-year period. Total sales volume rose by more than 4%. Acquisition-related sales provided benefits of $27 million.

Net income at the segment was $212 million, down 10.2% year over year as cost improvements and strong sales volume gains was offset by significant raw material inflation and slightly reduced selling price. Favorable currency swings increased segment income by $6 million.

Financial Position

PPG Industries ended 2017 with cash and cash equivalents of $1,436 million, down 21.1% year over year. Long-term debt rose 9.2% year over year to $4,134 million.

Outlook

PPG Industries anticipates additional selling price increases this year. The company is committed towards deploying at least $2.4 billion of cash in 2018 backed by acquisitions and share repurchases as part of its earlier communicated goal of deploying $3.5 billion in 2017 and 2018 combined. The company expects its effective tax rate to be in the range of 23-24% for 2018.

Price Performance

PPG Industries has underperformed the industry over the past year. The company’s shares have moved up around 17.4% compared with roughly 29.2% gain recorded by the industry.