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PPG Industries Inc. PPG is set to release first-quarter 2025 results after the closing bell on April 29.
PPG Industries missed the Zacks Consensus Estimate for earnings in two of the trailing four quarters, beat once while delivering in-line results on the other occasion. It delivered a trailing four-quarter negative earnings surprise of around 0.6%, on average. While the company is expected to have benefited from acquisitions and restructuring cost savings in the first quarter, its performance is likely to have been adversely impacted by weak demand.
PPG's shares are down 21.5% in the past year compared with the Zacks Chemicals Specialty industry’s 4.3% decline.
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Let’s see how things are shaping up for this announcement.
What Our Model Unveils for PPG Stock
Our proven model predicts an earnings beat for PPG this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for PPG is +1.35%. The Zacks Consensus Estimate for the first quarter is currently pegged at $1.62. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: PPG currently carries a Zacks Rank #3.
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
What Do PPG’s Revenue Estimates Say?
The Zacks Consensus Estimate for sales for the to-be-reported quarter is currently pegged at $3,655.9 million, which suggests a decline of around 15.2% from the year-ago quarter.
Our estimate for PPG’s Industrial Coatings segment’s net sales is pegged at $1,556.8 million, indicating an 8.4% decline on a year-over-year basis.
Also, our estimate for net sales for the Performance Coatings segment stands at $1,199.3 million, suggesting a year-over-year increase of 1.3%. The same for the Global Architectural Coatings segment is pinned at $967.9 million, suggesting a 0.2% year-over-year rise.
Factors at Play for PPG
The company is pursuing an aggressive cost-cutting and restructuring strategy to optimize its global cost structure. PPG has implemented considerable actions to address adverse business conditions in specific areas and end-use markets. The cost savings generated by restructuring initiatives are likely to have acted as a tailwind for the company in the March quarter. PPG expects around $45 million in restructuring savings (net of stranded costs) for full-year 2025. PPG also announced a comprehensive cost reduction program, which is expected to deliver pre-tax savings of $60 million in 2025. The program includes the reduction of structural costs, mainly in Europe and in certain other global businesses.
PPG Industries is also raising selling prices across its business segments to offset the impact of cost inflation and drive profitability. The company is expected to have made substantial progress toward increasing consolidated segment margins in the first quarter.
The company is taking steps to build its business inorganically by making value-creating acquisitions. Contributions from acquisitions are expected to reflect on its first-quarter performance. Acquisitions such as Tikkurila, Worwag, Cetelon and Arsonsisi’s powder coatings manufacturing business are likely to have supported its top line.
PPG is being challenged by weak global industrial production, which is likely to have affected demand in the Industrial Coatings unit. Lower automotive OEM build rates and softer industrial production in the United States and Europe are expected to have impacted volumes and sales in this unit. Weak consumer confidence is negatively impacting demand in Europe.
Automotive industry build rates have fallen in Europe and the United States as a result of decreased demand, and they are anticipated to have declined further in the first quarter. Organic growth is expected to have been limited by lower automotive OEM and industrial production in the first quarter. Industrial coatings demand is likely to have remained under pressure in the quarter.