PPG Industries Inc. (PPG) has a diversified business and a leading position in several paints and coatings end markets. The company is gaining from healthy momentum across major end-use markets such as automotive OEM and aerospace and continued demand recovery in Europe.
PPG Industries also has been actively focused on growing its business inorganically, manifested by major buyouts of Akzo Nobel’s North American architectural coatings assets and Mexico’s leading paint company – Comex. However, raw material cost pressure and currency headwinds have been concerns for the company.
Let’s have a quick look at this Pittsburgh-based coating giant’s fourth-quarter release.
Estimate Trend & Surprise History
Investors should note that the earnings estimate for PPG Industries for the fourth quarter has been stationary over the past week and month. The Zacks Consensus Estimate has remained static at $1.97 over these periods.
PPG Industries has delivered a flurry of positive earnings surprises. It has beaten the Zacks Consensus Estimate in the trailing 4 quarters with an average beat of around 3.4%. Investors have been eagerly awaiting PPG Industries’ latest earnings report to see whether it makes a clean sweep in 2014 with outperformance in all four quarters.
Earnings Top Again
PPG Industries raked in adjusted earnings of $2.11 per share that topped the Zacks Consensus Estimate of $1.97.
Volume gains across major regions, strong growth in the industrial coatings business and synergies from acquisitions supported the results.
Revenues Came Ahead
PPG Industries logged revenues of $3,707 million. That beat the Zacks Consensus Estimate of $3,571 million and was also ahead of $3,500 million posted a year-ago.
Key Stats/Developments to Note
PPG Industries sees growth to remain mixed by region in 2015 with North America and Asia continuing to grow at levels that are in tandem with 2014. It expects to deploy $1.5 billion to $2.5 billion of cash in this year and 2016 on acquisitions and share buybacks.
Zacks Rank
PPG Industries currently has a Zacks Rank #2 (Buy), which testifies its remarkable earnings surprise track record, further evidenced by the strong earnings report which was just released.
Market Reaction
PPG Industries’ shares, which have closed essentially flat over the last four trading sessions, were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.
Check back later for our full write up on PPG Industries’ earnings report!
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