PPG stock price plummets due to poor performance, weak guidance By Investing.com
PITTSBURGH – PPG Industries (NYSE:) announced its first quarter financial results, reporting adjusted EPS of $1.86, in line with analyst expectations. However, the company’s revenue fell short of consensus estimates at $4.31 billion, compared to $4.43 billion expected. Reported sales also decreased 2% compared to $4.38 billion in the first quarter of last year.
The paints and coatings giant saw its shares fall slightly following the announcement, down 0.75%. The move stems from the company’s poor performance and the release of weaker-than-expected guidance for the upcoming second quarter and full fiscal year. PPG Industries expects second-quarter 2024 EPS to be between $2.42 and $2.52, below the analyst consensus of $2.55. Moreover, expected full-year EPS is set at between $8.34 and $8.59, which is also below the consensus estimate of $8.48.
Commenting on the quarter, PPG Chairman and CEO Tim Knavish highlighted the company’s sixth consecutive quarter of margin expansion and year-over-year adjusted EPS growth despite macroeconomic challenges. Knavish pointed to the impact of lower demand in Europe, including early Easter holidays, and sluggish global demand for industrial coatings. He also cited the company’s strategic review of its U.S. and Canadian architectural coatings businesses and its global silica products business, with the goal of determining a path forward by the third quarter.
The company’s Performance Coatings segment saw net sales decline 1%, while its Industrial Coatings segment declined 3%. Despite this decline, segment margins improved, with performance coatings up 40 basis points and industrial coatings up 100 basis points compared to the first quarter of the previous year.
PPG Industries remains focused on its growth initiatives and expects low-single-digit total sales growth in the second quarter, led by its Aerospace, Protective & Marine, and Packaging Coatings businesses, as well as continued growth in Mexico, China, and India.
Knavish added, “I would like to thank our more than 50,000 employees around the world who work with our customers every day to pursue mutual success by providing best-in-class paints, coatings and specialty materials, including improved productivity and sustainable solutions.” Yes. .
Investors are now watching closely to see how PPG will navigate the current economic climate and whether it can achieve the modest growth and margin improvement it expected for the remainder of the year.
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