PPG Industries, Inc. reports results for the quarter ended September 30 - Earnings Summary

What happened

PPG Industries reported quarterly adjusted earnings of $2.25 per share, above the $2.13 reported a year earlier and the $2.12 average expectation of twenty-two analysts. Revenue rose 6.6% to $4.35 billion, while reported earnings per share were $2.02 and net income was $451 million.

Confirmed

Global impact / market context

Higher adjusted earnings and revenue than analysts expected suggest PPG sold more or kept more profit per sale, which supports future capital spending and cash available. The gap between adjusted and reported earnings per share also shows costs excluded from the adjusted figure that investors should weigh.

Analyst inference

Analyst earnings estimates fell about 0.6% over three months, with six negative revisions in thirty days, even as the average rating is buy. The median 12-month price target of $126.00 sits about 10% above the $113.44 last close, implying analysts see room for upside.

Analyst inference

What to watch

1. Watch whether later quarters confirm the earnings beat, since six analysts cut estimates in the last 30 days and the mean estimate fell about 0.6% over three months, signaling uneven expectations. Confirmed
2. Track whether PPG converts higher revenue into profit per sale, because the reported earnings per share of $2.02 trails the adjusted $2.25, meaning certain costs are excluded from the adjusted figure. Proposed
3. Compare PPG with its commodity chemicals peer group, where the average recommendation is also buy, to see whether its 10% upside to the $126.00 median target holds if peer sentiment shifts. Analyst inference

Evidence

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