01—Abstract
Summary
Summary of the 10-Q filed April 30, 2025. Cited figures are marked; the original filing is the authoritative source.
PPG Industries, Inc. reported first-quarter 2025 net sales of $3,684 milliona, down from $3,849 million in the prior-year quarter, with the filing attributing the decline to unfavorable foreign currency translation, divestiture-related sales, partially offset by higher sales volumes.
Income before income taxes was $502 millionb versus $542 million, and net income attributable to PPG was $373 million versus $400 million. Diluted earnings per share from continuing operations were $1.64, compared with $1.71 a year earlier. The company's adjusted diluted EPS, a non-GAAP measure reconciled in the filing, was $1.72 versus $1.87, reflecting unfavorable currency translation and material, wage and other cost inflation, partially offset by higher selling prices.
Cash and short-term investments totaled $1.9 billionc at March 31, 2025, up from $1.4 billion at year-end 2024. Cash used for operating activities from continuing operations was $16 million, compared with cash from operations of $7 million a year earlier, primarily due to unfavorable working capital changes. PPG issued a €900 million 3.250% Notes due 2032, with net cash proceeds of $940 million, and repurchased $385 million of treasury stock in the quarter, per the shareholders' equity statement.
Total debt rose, with long-term debt of $5,574 milliond and short-term debt of $1,688 million at quarter-end. The filing also notes the sale of its remaining Russian business in the first quarter and the sale of the U.S. and Canada architectural coatings business in December 2024. A material legal matter disclosed is the Di Gregório litigation in Brazil, where a court award against PPG as nominal defendant is described as over $700 million including prejudgment interest, fees and costs, with Westlake's later estimate of approximately $350 million under simple prejudgment interest.
PPG has sued Westlake in Delaware, with a trial date set for May 6, 2025, and states it believes the risk of loss associated with this matter is remote. Management states that aggregate litigation outcomes are not expected to have a material effect on consolidated financial position or liquidity.
02—Key points
Key Highlights
- Net sales of $3,684 million, down from $3,849 million; the filing attributes the decline to unfavorable foreign currency translation (-3%) and divestiture-related sales (-2%), partially offset by higher sales volumes (+1%).
- Net income attributable to PPG was $373 million versus $400 million; diluted EPS from continuing operations was $1.64 versus $1.71, and adjusted diluted EPS was $1.72 versus $1.87.
- Segment income: Global Architectural Coatings $118 million (down from $166 million), Performance Coatings $274 million (up from $251 million), Industrial Coatings $215 million (down from $249 million).
- Cash and short-term investments rose to $1.9 billion; the company issued €900 million of 3.250% Notes due 2032 with net proceeds of $940 million.
- Operating cash flow from continuing operations was negative $16 million versus positive $7 million, primarily due to unfavorable working capital changes; capital expenditures were $209 million.
- Di Gregório litigation in Brazil: an award described as over $700 million including interest, fees and costs, with Westlake's later estimate of approximately $350 million; PPG's Delaware lawsuit against Westlake has a trial date of May 6, 2025.
- Total capital spending expected at approximately $725 million to $775 million in 2025; PPG repurchased 3,205,395 shares in January 2025 at an average price of $119.04.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, PPG Industries kept $0.10.
- Revenue$3.68B100.0%
- Cost of revenue−$2.14B58.1%
- Gross profit$1.54B41.9%
- Operating costs−$935.0M25.4%
- Operating income$607.0M16.5%
- Interest, other & tax−$234.0M6.4%
- Net income$373.0M10.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed April 30, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $3.68B$3.85B | −4.3% |
| Cost of Revenue | $2.14B$2.21B | −2.9% |
| Gross Profit | $1.54B$1.64B | −6.2% |
| SG&A Expenses | $838.00M$850.00M | −1.4% |
| Operating Income | $607.00M$666.00M | −8.9% |
| Interest Expense | $56.00M$55.00M | +1.8% |
| Net Income | $373.00M$400.00M | −6.7% |
| EPS (Basic) | $1.63$1.70 | −4.1% |
| EPS (Diluted) | $1.63$1.69 | −3.6% |
| Shares Outstanding (Basic) | 228.00M235.60M | −3.2% |
| Shares Outstanding (Diluted) | 228.90M236.90M | −3.4% |
05—Questions
Frequently Asked Questions
How did PPG's core profitability trend in the first quarter of 2025?
Income before income taxes was $502 million versus $542 million a year earlier, and the filing attributes the $40 million decrease primarily to unfavorable foreign currency translation and material, wage and other cost inflation, partially offset by higher selling prices. Other (income)/charges, net was income of $34 million, including an insurance reimbursement, a gain on the Russia business sale, and transition services income.
What is the status of the Di Gregório litigation and PPG's exposure?
A Brazilian court entered an award against PPG as nominal defendant that Westlake estimated at over $700 million with interest, fees and costs, later estimated at approximately $350 million under simple prejudgment interest. Westlake has stated it will not post a bond or pay the judgment while it appeals. PPG has sued Westlake in Delaware, a trial is set for May 6, 2025, and PPG states it believes the risk of loss is remote.
How did PPG change its balance sheet and debt position during the quarter?
Total debt increased, with long-term debt rising to $5,574 million from $4,876 million and short-term debt and current portion rising to $1,688 million from $939 million. The company issued €900 million of notes due 2032 and borrowed an additional €300 million under its Term Loan. The Total Indebtedness to Total Capitalization ratio was 50% against a covenant maximum of 60%.
Which business segments drove the change in results?
Performance Coatings was the main improvement, with net sales up 6.8% to $1,265 million and segment income up 9.2% to $274 million, driven by higher sales volumes and selling prices. Global Architectural Coatings and Industrial Coatings declined, with segment income of $118 million and $215 million respectively, reflecting currency translation, lower volumes and inflation.
What did PPG say about its outlook and cost actions?
The company expects total capital spending of approximately $725 million to $775 million in 2025 and total restructuring savings of $75 million in 2025, with related cash outlays of approximately $100 million. Management expects second-quarter organic sales to be flat to up a low single-digit percentage for Global Architectural Coatings, up a low to mid single-digit percentage for Performance Coatings, and down a low to mid single-digit percentage for Industrial Coatings.
06—Continue