How did PPG perform in the first quarter of 2024?

Net sales were $4,311 million, down 2% from $4,380 million a year earlier. Reported diluted EPS rose to $1.69 from $1.11, and adjusted EPS rose 2% to $1.86 from $1.82. Reported net income attributable to PPG was $400 million, compared with $264 million in the prior-year quarter, which included a $190 million pension settlement charge.

What is PPG's guidance for 2024?

PPG expects second-quarter 2024 adjusted EPS of $2.42 to $2.52 per share and full-year 2024 adjusted EPS of $8.34 to $8.59 per share. It projects organic sales growth of up low single digits for both periods. The second-quarter effective tax rate is expected to be between 23.5% and 24.5%.

What are the strategic reviews PPG mentioned?

PPG is executing strategic reviews of its architectural coatings U.S. and Canada business and its global silicas products business, both announced in the first quarter. The company targets determining a path forward for each no later than the third quarter.

How is PPG's balance sheet and cash flow position?

At quarter end, PPG had cash and short-term investments of $1.2 billion and net debt of $5.0 billion, down $0.8 billion from the first quarter 2023. Cash used for operating activities was $60 million, compared with $85 million provided in the prior-year quarter, and the company completed about $150 million of share repurchases and paid $153 million in dividends.

What drove the sales decline in the quarter?

Performance Coatings sales fell 1% on a 3% decline in sales volumes, partly offset by a 1% increase in selling prices and a 1% favorable currency effect; the prior year included a $40 million Walmart load-in benefit and Easter timing shifted into the first quarter. Industrial Coatings sales fell 3%, driven by a 2% decline in selling prices and a 1% decline in volumes, including the absence of prior-year European energy surcharges.

PPG 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 18, 2024. Cited figures are marked; the original filing is the authoritative source.

PPG Industries, Inc. reported first quarter 2024 results in an earnings press release (Exhibit 99) dated April 18, 2024.

Reported net sales were $4,311 million^a, down 2% from $4,380 million in the prior-year quarter, and organic sales declined 2% (down 1% excluding a prior-year large customer load-in). Reported net income attributable to PPG rose to $400 million from $264 million, and diluted EPS was $1.69 versus $1.11. Adjusted EPS was $1.86 versus $1.82, up 2%, which the company described as its fifth consecutive quarter of year-over-year adjusted EPS growth.

Segment margins improved 60 basis points year over year, the sixth consecutive quarter of margin expansion. By segment, Performance Coatings net sales were $2,614 million^b (down 1%) with segment income of $402 million (up 2%), while Industrial Coatings net sales were $1,697 million (down 3%) with segment income of $249 million (up 4%). Cash and short-term investments totaled $1.2 billion at quarter end, and net debt was $5.0 billion, down $0.8 billion from the first quarter 2023.

Cash used for operating activities was $60 million^c compared with $85 million provided in the prior-year quarter, and capital expenditures rose to $256 million from $120 million. The company completed approximately $150 million of share repurchases in the quarter.

For 2024, PPG guided to second-quarter adjusted EPS of $2.42 to $2.52^d per share and full-year adjusted EPS of $8.34 to $8.59 per share, with organic sales growth of up low single digits for both periods. The company also said it is executing strategic reviews of its U.S. and Canada architectural coatings business and its global silicas products business, with a path forward targeted for each no later than the third quarter.

02—Key points

Key Highlights

Q1 2024 reported EPS of $1.69 (up from $1.11) and adjusted EPS of $1.86 (up 2% from $1.82), with reported net income of $400 million.
Net sales of $4,311 million, down 2% year over year; organic sales declined 2%, or 1% excluding a prior-year large customer load-in.
Segment margins improved 60 basis points year over year, the sixth consecutive quarter of margin expansion.
Performance Coatings segment income rose 2% to $402 million despite a 1% sales decline; Industrial Coatings segment income rose 4% to $249 million on a 3% sales decline.
Net debt of $5.0 billion, down $0.8 billion from the first quarter 2023; cash and short-term investments of $1.2 billion.
Cash used for operating activities was $60 million versus $85 million provided a year earlier, while capital expenditures increased to $256 million from $120 million.
Full-year 2024 adjusted EPS guidance of $8.34 to $8.59 per share, with second-quarter guidance of $2.42 to $2.52 per share; strategic reviews of architectural coatings (U.S. and Canada) and global silicas underway.

03—Questions

Frequently Asked Questions

How did PPG perform in the first quarter of 2024?
Net sales were $4,311 million, down 2% from $4,380 million a year earlier. Reported diluted EPS rose to $1.69 from $1.11, and adjusted EPS rose 2% to $1.86 from $1.82. Reported net income attributable to PPG was $400 million, compared with $264 million in the prior-year quarter, which included a $190 million pension settlement charge.
What is PPG's guidance for 2024?
PPG expects second-quarter 2024 adjusted EPS of $2.42 to $2.52 per share and full-year 2024 adjusted EPS of $8.34 to $8.59 per share. It projects organic sales growth of up low single digits for both periods. The second-quarter effective tax rate is expected to be between 23.5% and 24.5%.
What are the strategic reviews PPG mentioned?
PPG is executing strategic reviews of its architectural coatings U.S. and Canada business and its global silicas products business, both announced in the first quarter. The company targets determining a path forward for each no later than the third quarter.
How is PPG's balance sheet and cash flow position?
At quarter end, PPG had cash and short-term investments of $1.2 billion and net debt of $5.0 billion, down $0.8 billion from the first quarter 2023. Cash used for operating activities was $60 million, compared with $85 million provided in the prior-year quarter, and the company completed about $150 million of share repurchases and paid $153 million in dividends.
What drove the sales decline in the quarter?
Performance Coatings sales fell 1% on a 3% decline in sales volumes, partly offset by a 1% increase in selling prices and a 1% favorable currency effect; the prior year included a $40 million Walmart load-in benefit and Easter timing shifted into the first quarter. Industrial Coatings sales fell 3%, driven by a 2% decline in selling prices and a 1% decline in volumes, including the absence of prior-year European energy surcharges.

04—Continue

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