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Why Is PPG Industries (PPG) Down 6% Since Last Earnings Report?
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A month has gone by since the last earnings report for PPG Industries (PPG - Free Report) . Shares have lost about 6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is PPG Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
PPG Industries' Earnings and Sales Miss Estimates in Q3
PPG Industries reported a third-quarter 2024 profit of $468 million or $2 per share, up from $426 million or $1.79 per share in the year-ago quarter.
In the reported quarter, excluding one-time items, adjusted earnings per share increased to $2.13 from $2.07 in the year-ago quarter, missing the Zacks Consensus Estimate of $2.15.
The company’s revenues were roughly $4.57 billion in the quarter, down roughly 1.5% year over year. The fall was due to soft global industrial production, which affected demand in the Industrial Coatings segment. The top line missed the Zacks Consensus Estimate of $4.65 billion.
Segment Review
The Performance Coatings segment’s third-quarter revenues increased 1.4% year over year to around $2.92 billion. Net revenues increased due to higher sales volumes and selling prices. Segment income climbed 13%, driven by higher sales volumes and prices, partly offset by general cost inflation.
Revenues in the Industrial Coatings segment were down 6.2% year over year to roughly $1.65 billion. Net sales were lower than the year-ago quarter due to a fall in sales volumes and selling prices from some index-based client contracts. Segment income fell 19% over the previous year due to lower sales volumes and reduced selling prices on certain index-based pricing contracts.
Financials
At the end of the third quarter, the company had roughly $1.25 billion in cash and cash equivalents, up around 2.7% year over year. Long-term debt was around $6.14 billion, up from $5.6 billion in the prior-year quarter.
Outlook
PPG anticipates flat organic sales and adjusted earnings per share at the bottom end of the $8.15 to $8.30 range for full-year 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, PPG Industries has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise PPG Industries has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is PPG Industries (PPG) Down 6% Since Last Earnings Report?
A month has gone by since the last earnings report for PPG Industries (PPG - Free Report) . Shares have lost about 6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is PPG Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
PPG Industries' Earnings and Sales Miss Estimates in Q3
PPG Industries reported a third-quarter 2024 profit of $468 million or $2 per share, up from $426 million or $1.79 per share in the year-ago quarter.
In the reported quarter, excluding one-time items, adjusted earnings per share increased to $2.13 from $2.07 in the year-ago quarter, missing the Zacks Consensus Estimate of $2.15.
The company’s revenues were roughly $4.57 billion in the quarter, down roughly 1.5% year over year. The fall was due to soft global industrial production, which affected demand in the Industrial Coatings segment. The top line missed the Zacks Consensus Estimate of $4.65 billion.
Segment Review
The Performance Coatings segment’s third-quarter revenues increased 1.4% year over year to around $2.92 billion. Net revenues increased due to higher sales volumes and selling prices. Segment income climbed 13%, driven by higher sales volumes and prices, partly offset by general cost inflation.
Revenues in the Industrial Coatings segment were down 6.2% year over year to roughly $1.65 billion. Net sales were lower than the year-ago quarter due to a fall in sales volumes and selling prices from some index-based client contracts. Segment income fell 19% over the previous year due to lower sales volumes and reduced selling prices on certain index-based pricing contracts.
Financials
At the end of the third quarter, the company had roughly $1.25 billion in cash and cash equivalents, up around 2.7% year over year. Long-term debt was around $6.14 billion, up from $5.6 billion in the prior-year quarter.
Outlook
PPG anticipates flat organic sales and adjusted earnings per share at the bottom end of the $8.15 to $8.30 range for full-year 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, PPG Industries has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise PPG Industries has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.