01—Abstract
Summary
Summary of the 10-Q filed October 28, 2026. Cited figures are marked; the original filing is the authoritative source.
PPG Industries reported third-quarter 2026 net sales of $4.35 billiona, up from $4.08 billion a year earlier, with the MD&A attributing the 6.6% increase to higher selling prices, higher sales volumes, favorable currency translation and acquisitions.
Income before income taxes rose to $631 millionb from $556 million, but net income attributable to PPG was $451 million, roughly flat with $453 million in the prior-year quarter, because of a $22 million loss from discontinued operations. Diluted EPS from continuing operations was $2.12 versus $1.96, and adjusted diluted EPS was $2.25 versus $2.13. For the nine months, net sales were $12.78 billion (up 6.8%), and net income attributable to PPG was $1.27 billion versus $1.28 billion, with diluted EPS from continuing operations of $5.78 versus $5.57.
Segment results were mixed. Global Architectural Coatings and Performance Coatings segment income each rose 22% in the quarter, driven by pricing, productivity and aerospace strength. Industrial Coatings segment income fell 14% to $200 millionc on cost of goods sold inflation, partly offset by higher volumes and pricing.
Management said price increases of 3% in the quarter fully offset cost of goods sold inflation tied to the Middle East conflict. Cash from operating activities for the nine months was $1.16 billiond versus $1.05 billion, and cash and cash equivalents fell to $1.59 billion from $2.16 billion at year-end 2025 after debt repayment, acquisitions and share repurchases. Long-term debt was $6.16 billion, and the company reported a 43% Total Indebtedness to Total Capitalization ratio under its credit agreement, against a 60% covenant maximum.
The filing also highlights a significant contingent liability. In the Di Gregório litigation, a Brazilian court entered an award against PPG as nominal defendant, which Westlake estimated at over $700 million with interest and costs and later at approximately $350 million under simple prejudgment interest. PPG is pursuing claims against Westlake in Delaware Chancery Court, expects a decision in the fourth quarter of 2026 or early 2027, and states that it believes the risk of loss is remote.
02—Key points
Key Highlights
- Q3 2026 net sales were $4.35 billion, up 6.6% from $4.08 billion, driven by higher selling prices (+3%), higher sales volumes (+2%), favorable currency translation (+1%) and acquisitions (+1%).
- Q3 2026 income before income taxes was $631 million versus $556 million, while net income attributable to PPG was $451 million versus $453 million, reflecting a $22 million loss from discontinued operations (U.S. and Canada architectural coatings).
- Diluted EPS from continuing operations was $2.12 in Q3 2026 versus $1.96; adjusted diluted EPS was $2.25 versus $2.13. For the nine months, diluted EPS from continuing operations was $5.78 versus $5.57.
- Segment performance diverged: Global Architectural Coatings and Performance Coatings segment income each rose 22% to $225 million and $332 million, while Industrial Coatings segment income fell 14% to $200 million.
- Cash from operating activities was $1.16 billion for the nine months versus $1.05 billion, while cash and cash equivalents declined to $1.59 billion from $2.16 billion at December 31, 2025 after acquisitions ($184 million), debt repayment ($700 million notes matured in March 2026) and treasury stock purchases ($322 million).
- PPG issued Swiss franc notes in June 2026 with aggregate net proceeds of $403 million, and entered a €250 million Euro Credit Agreement in May 2026; no amounts were outstanding under the primary credit agreements at September 30, 2026.
- The Di Gregório litigation, in which Westlake controls the defense, could result in an award against PPG of over $700 million with interest and costs or approximately $350 million under Westlake's simple-interest view; PPG believes the risk of loss is remote and expects the Delaware Chancery decision in Q4 2026 or early 2027.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, PPG Industries kept $0.10.
- Revenue$4.35B100.0%
- Cost of revenue−$2.59B59.5%
- Gross profit$1.76B40.5%
- Operating costs−$1.01B23.1%
- Operating income$757.0M17.4%
- Interest, other & tax−$306.0M7.0%
- Net income$451.0M10.4%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed October 28, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $4.35B$4.08B | +6.6% |
| Cost of Revenue | $2.59B$2.43B | +6.7% |
| Gross Profit | $1.76B$1.66B | +6.5% |
| SG&A Expenses | $876.00M$824.00M | +6.3% |
| Operating Income | $757.00M$689.00M | +9.9% |
| Interest Expense | $67.00M$65.00M | +3.1% |
| Net Income | $451.00M$453.00M | −0.4% |
| EPS (Basic) | $2.03$2.01 | +1.0% |
| EPS (Diluted) | $2.02$2.00 | +1.0% |
| Shares Outstanding (Basic) | 222.20M225.70M | −1.6% |
| Shares Outstanding (Diluted) | 223.20M226.50M | −1.5% |
05—Questions
Frequently Asked Questions
How did PPG's profitability change in the third quarter of 2026?
Income before income taxes increased to $631 million from $556 million, and income from continuing operations attributable to PPG rose to $473 million from $444 million. Net income attributable to PPG was $451 million versus $453 million because of a $22 million loss from discontinued operations. The effective tax rate was 24.2% versus 21.2%.
Which segments drove results, and which declined?
Global Architectural Coatings segment income rose 22% to $225 million and Performance Coatings rose 22% to $332 million, supported by higher selling prices, productivity and aerospace strength. Industrial Coatings segment income fell 14% to $200 million, driven by cost of goods sold inflation, partly offset by higher sales volumes and selling prices.
What is the outlook for the fourth quarter of 2026?
Management expects Global Architectural Coatings organic sales to be flat to up a low single-digit percentage versus Q4 2025, Performance Coatings organic sales to grow a low to mid single-digit percentage, and Industrial Coatings organic sales to range from a low single-digit decline to low single-digit growth. Total 2026 capital spending is expected to be approximately $650 million to $700 million.
How is PPG's debt and liquidity position?
At September 30, 2026, short-term debt and current portion of long-term debt was $686 million and long-term debt was $6.16 billion, versus $706 million and $6.60 billion at year-end 2025. Total Indebtedness to Total Capitalization was 43% against a covenant maximum of 60%. Cash and short-term investments totaled $1.6 billion, and the company reported full compliance with its restrictive covenants.
What is the status of the Westlake-related Di Gregório litigation?
A Brazilian court entered an award against PPG, which remains the nominal defendant. Westlake estimated the total with interest, fees and costs at over $700 million and later at approximately $350 million under simple prejudgment interest. PPG's Delaware Chancery lawsuit against Westlake is pending, with a decision expected in Q4 2026 or early 2027, and PPG believes the risk of loss is remote.
06—Continue