PPG has reported financial results for its third quarter 2022.

  • Record third quarter net sales of $4.5 billion, up about 8% in constant currencies
  • Organic sales growth of more than 9% driven by higher selling prices, which are up 18% on a two-year stacked basis
  • Reported earnings per diluted share from continuing operations (EPS) of $1.39 and adjusted EPS of $1.66
  • Inflationary cost pressures persisted with raw material cost inflation of nearly 40% on two-year stack; energy costs continue to rise
  • Expect improving pace of year-over-year segment operating margin recovery in fourth quarter and into 2023

Michael H. McGarry, PPG chairman and chief executive officer, said, “We achieved record sales in the third quarter driven by continued selling price realization, resulting in more than a 12% increase in selling prices versus the third quarter 2021, and an 18% increase on a two-year stacked basis. However, as we previously communicated, sales volumes were impacted by further softening demand in Europe and less sequential quarterly demand recovery in China than was expected, due to a resumption of certain pandemic-related restrictions. These factors, along with worsening foreign currency translation impacts, caused our sales growth to be lower than anticipated at the beginning of the quarter.”

Performance Coatings Results

Performance Coatings net sales decreased 2% – compared to Q3 2021 – due to lower sales volumes, the impact of divestitures, the wind down of business in Russia, and unfavorable foreign currency translation impacts. These items were partially offset by selling price increases in all businesses.

Supply chain disruptions continued to moderate during the quarter, albeit with some remaining challenges. As expected, demand for architectural coatings DIY products in Europe remained soft due to decreased consumer confidence and customer inventory destocking stemming from current geopolitical issues. Sales volumes in the U.S. architectural coatings business were also impacted by weaker DIY demand, which offset positive trends related to our recently announced expanded relationship with The Home Depot® in the professional paint channel. Automotive refinish coatings organic sales grew by a mid-single-digit percentage driven by higher selling prices that were partially offset by lower sales volumes, most notably in China due to COVID-19 restrictions. Organic sales in the protective and marine coatings business grew by a low-single-digit percentage despite COVID-19 restrictions in China negatively impacting sales volumes.

Segment income was 11% lower than the prior year, mainly due to raw material, logistics, and labor cost inflation, the impact of lower sales volumes, unfavorable currency translation and increased manufacturing costs, partially offset by higher selling prices coupled with restructuring cost savings. Unfavorable foreign currency translation negatively impacted segment earnings by nearly $25 million.

Industrial Coatings

Industrial Coatings net sales increased 9% – compared to Q3 2021 – due to higher selling prices across all businesses and increased sales volumes, partially offset by unfavorable foreign currency translation and the wind down of business in Russia. Automotive OEM coatings organic sales were up more than 20% due to higher selling prices and sales volumes, including record sales in Asia Pacific, reflecting the company’s strong position in this region and robust retail sales in China. Automotive OEM customer production outages due to component shortages continued to impact sales in the United States and Europe, but moderated year-over-year. Industrial coatings organic sales were up a high single-digit percentage driven by strong selling price realization, partially offset by lower sales volumes in Europe and China due to softer industrial production activity. Packaging coatings delivered organic sales growth of about 10% led by higher selling prices and continued U.S. sales volume strength.

Segment income was higher than the prior year by $52 million, mainly due to higher selling prices and improving sales volumes, partially offset by increased raw material and energy costs and foreign currency translation. Segment margins improved on a sequential quarterly basis compared to the second quarter 2022.


The company reported the following projections for the fourth quarter 2022 based on current global economic activity and in consideration of the near-term economic uncertainty associated with the impact of geopolitical issues in Europe and the continuing pandemic:

  • Aggregate sales volumes down a mid-single-digit percentage year-over-year
  • Corporate expenses of between $55 million and $60 million
  • Net interest expense of between $35 million and $40 million
  • Effective tax rate of about 20%
  • Reported EPS of $0.90 to $1.05
  • Adjusted EPS of $1.05 to $1.20, excluding amortization expense of $0.13 and costs related to previously approved and communicated business restructuring of $0.02.

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