PPG Industries : 1Q 2026 Earnings Conference Call Prepared Commentary
PPG
Published on 04/28/2026 at 05:14 pm EDT
PPG First Quarter 2026 Financial Results
Earnings Brief - April 28, 2026
These prepared remarks should be read in conjunction with PPG's earnings press release and related presentation that were posted on PPG's website at investor.ppg.com on April 28, 2026. In addition, these detailed remarks supplement the commentary that the company makes on its first quarter 2026 earnings conference call on April 29, 2026.
EPS was $1.83, an increase of 6% year over year.
PPG first quarter net sales were $3.9 billion, an increase of 7% compared with the first quarter 2025. Organic sales(a) increased 1%, marking our fifth consecutive quarter of organic sales growth, driven by higher selling prices. Growth momentum was led by our differentiated aerospace and architectural coatings Latin America businesses. Foreign currency translation benefited the quarter by 6%. Reported earnings per diluted share (EPS) was $1.70 and adjusted
Several businesses in the Performance Coatings segment delivered significant growth, including exceptional sales and earnings in aerospace and high single digit percentage organic sales growth in protective and marine coatings and traffic solutions. This was offset by expected lower sales volumes in automotive refinish coatings as volumes were heavily weighted to the first half of 2025 due to distributor order patterns, resulting in a difficult year-over-year comparison. Share gains were evident across the portfolio with above-market growth in automotive original equipment manufacturer (OEM) coatings, packaging coatings and protective and marine coatings.
Regionally, organic sales grew a mid-single-digit percentage in Asia Pacific driven by above-market growth in the industrial coatings segment and the protective and marine coatings business. While organic sales declined a low single-digit percentage in the U.S. and Canada, primarily due to the automotive refinish year-over-year comparison, it increased a low single-digit percentage in Latin America and Europe.
Our balance sheet remains strong, and consistent with our heritage, we remain focused on shareholder value creation. During the quarter, the company returned $260 million to shareholders including dividends of approximately $160 million and stock repurchases of approximately $100 million.
PPG delivered a segment EBITDA margin of 19.2%, relatively flat compared to the prior-year first quarter, driven by margin expansion in the Global Architectural Coatings segment, offset by margin compression in the Industrial Coatings segment.
Organic sales increased 1% year over year led by higher selling prices and flat sales volumes.
Organic growth was strong in aerospace, architectural coatings in Latin America and protective and marine coatings and we benefitted from share gains in the Industrial Coatings segment which helped to offset lower automotive refinish coatings sales volumes. Net sales also included a 6% benefit from foreign currency translation.
Global Architectural Coatings Segment First quarter 2026 net sales for the Global Architectural Coatings segment were $965
million, an increase of 13% compared to the prior year. Results benefited from a 12% increase in foreign currency translation and were negatively impacted by 1% due to the divestiture of the architectural coatings business in Russia. Organic sales grew 2% with selling prices increasing 2% and flat sales volumes.
Segment EBITDA increased 28% and segment EBITDA margin improved 230 basis points compared to the prior year with realization of higher selling prices and self-help actions.
Architectural coatings - Europe, Middle East, and Africa (EMEA)
First quarter organic sales for architectural coatings - EMEA decreased by a low single-digit percentage compared to the prior year with higher selling prices more than offset by lower sales volumes. Overall demand for architectural coatings in Europe was mixed by country.
Architectural coatings - Latin America and Asia Pacific
Organic sales for architectural coatings - Latin America and Asia Pacific increased by a mid-single-digit percentage compared to the prior-year quarter driven by strength in Latin America. In Mexico, retail sales volumes were solid in the quarter, reflecting strong consumer demand. Project-related spending recovered somewhat with increased government and local investment, while economic uncertainty continues to temper foreign direct business investment.
Outlook
In the second quarter of 2026, the company expects further year-over-year strengthening in retail sales and a modest recovery of project-related spending in Mexico, while consumer sentiment in Europe is anticipated to remain mixed. Quarterly aggregate organic sales for the segment are expected to be in the range of flat to a positive low single-digit percentage compared to the second quarter 2025, and year-over-year EBITDA margin improvement is anticipated to be similar to the improvement in first quarter 2026.
First quarter 2026 net sales for the Performance Coatings segment were $1.3 billion, an increase of 5% compared to the prior year. Selling prices increased by 3% year over year, and sales volumes decreased 2%, with organic sales growth led by aerospace coatings, protective and marine coatings, and traffic solutions partially offset by automotive refinish coatings. Segment net sales also increased 3% due to foreign currency translation and 1% due to acquisitions.
Compared to the first quarter 2025, segment EBITDA increased by 6% and segment EBITDA margin improved slightly, driven by higher selling prices partially offset by lower automotive refinish coatings sales volumes and higher growth-related investment spending in aerospace and protective and marine coatings.
Aerospace coatings
First quarter net sales and earnings were exceptional for aerospace with organic sales increasing by a double-digit percentage compared to the first quarter 2025, led by higher selling prices and sales volumes. Demand is robust, and customer order backlogs remained at approximately $315 million, even with improved manufacturing output stemming from growth-related debottlenecking investments. Global international and domestic air travel improved year over year, and combined are above pre-pandemic levels. As demand for our technology-advantaged products grows, the company is focused on further manufacturing debottlenecking and capacity expansion through greenfield investment to drive additional volume and earnings growth in this resilient business.
Automotive refinish coatings
First quarter organic sales for automotive refinish coatings decreased by a double-digit percentage versus the prior year. As expected, results were impacted by lower organic sales, reflecting a difficult comparison to the prior year when customer order patterns were heavily weighted to the first half of 2025 to optimize their pricing. Automotive refinish coatings organic sales are anticipated to improve for PPG in the second half of the year, and we are already seeing early signs of demand improvement in the U.S. refinish market as automotive insurance claims have been down 1% in February and March, with three out of the last four months down a low single-digit percentage, reinforcing a normalization trend for the industry. In the first quarter, the company grew the number of PPG LINQ™ subscriptions and PPG Moonwalk™ installations, which now total more than 3,300, further increasing our addressable market and supporting customer productivity and related share gains.
Protective and marine coatings
Organic sales for protective and marine coatings increased by a high single-digit percentage compared to the prior-year first quarter driven by higher sales volumes. The first quarter was the twelfth consecutive quarter with positive year-over-year sales volume growth. Increased sales volumes were driven by share gains in both protective and marine, reflecting demand for PPG's sustainably-advantaged products.
Traffic solutions
First quarter organic sales for the traffic solutions business increased by a high single-digit percentage compared to the prior-year, outpacing the industry. The first quarter was the eighth consecutive quarter with year-over-year sales volume increases. Seasonally, first and fourth quarter sales in the business
are typically lower, at about half of the second and third quarter levels, due to the difficulty of applying traffic markings in colder temperatures.
Outlook
Looking ahead, we anticipate continued strength in aerospace coatings as well as protective and marine coatings. While automotive refinish coatings continue to gain share through demand for the company's bundled coatings and digital services business model, we expect lower organic sales year over year in the second quarter due to customer order patterns in 2025. Automotive refinish coatings organic sales are anticipated to improve for PPG in the second half of the year. Traffic solutions is expected to follow typical seasonal trends. Second quarter organic sales for the segment are anticipated to be within the range of flat to a positive low single-digit percentage compared to the second quarter 2025.
The PPG aerospace business provides unique technology-advantaged and highly specified products in various subsegments: transparencies, sealants and adhesives, coatings, and service and materials. In each one of these verticals, we have a strong presence that allows us to provide a superior customer offering including distribution capabilities, creating a truly unique value driver for our company and shareholders.
Two such technology-advantaged aerospace products that are designed to provide customized chemistry solutions inside the can and productivity for our customers outside the can are PPG's PRC Seal Cap and ARETM 3D Printed Sealants. The seal caps are designed to provide lighting strike protection for aircraft while improving application time and material usage for our customers. The ARETM Printed Sealants are a customized gasket solution that provides superior quality and increased customer productivity.
First quarter net sales for the Industrial Coatings segment were $1.6 billion, an increase of 4% compared to the prior year. Organic sales were flat compared to the first quarter 2025 as sales volumes increased 1%, as we realized the benefits of share gains in automotive OEM coatings and packaging coatings.
This was partially offset by selling prices which declined 1% due to carry over impacts from certain index-based customer contracts. The
quarter also included a 4% benefit from foreign currency translation.
Segment EBITDA decreased 7% and segment EBITDA margin declined 180 basis points compared to the first quarter 2025. This was driven by regional mix and lower selling prices due to index-based contracts.
Automotive OEM coatings
Organic sales for automotive OEM coatings decreased by a low single-digit percentage compared to the first quarter 2025 driven by lower indexed-based selling prices. Sales volumes were flat, including share gains, which outpaced the decline in global automotive industry production by about 300 basis points.
Margins in the first quarter were negatively impacted by regional mix as China automotive production dropped in comparison to a particularly high level in the first quarter of last year. In China, automotive industry retail sales decreased 17% during the first quarter while exports have grown approximately 55% year to date compared to the prior year. Global auto industry production in the second quarter is expected to be flat compared to the prior-year quarter with year over year declines in Europe and North America offset by growth in Asia Pacific and Latin America.
Industrial coatings
First quarter industrial coatings organic sales declined by a low single-digit percentage compared to the prior year driven by higher selling prices which were more than offset by lower sales volumes mostly in the U.S. Sales in some product categories were above prior-year levels, including solid growth in heavy duty equipment and coil. The most pronounced weakness was in kitchen and bakeware, consumer electronics and appliances.
Packaging coatings
First quarter organic sales in packaging coatings increased by a double-digit percentage compared to the prior year, with higher sales volumes partially offset by lower index-based prices. Results reflect the positive momentum from share gains in the U.S. and Canada, Asia Pacific and Europe, aided by expanding European regulations. On a two year stacked basis, PPG volumes are up about 20 percent, well outpacing industry growth. Globally, beverage and food packaging demand is solid, and PPG sales volume growth is expected to outpace the market.
Outlook
Looking ahead, our share gains in automotive OEM coatings and packaging coatings are yielding benefits, and we expect to outperform the respective markets again in the second quarter. As a result, aggregate organic sales for the segment are anticipated to be in the range of flat to a positive low single-digit percentage compared to the second quarter 2025 driven by flat selling prices and higher sales volumes.
With the impact of the Iran war, input costs have risen for many of our raw materials suppliers.
Certain regional energy costs, logistics and packaging costs are inflating across the coatings value chain. In this rapidly evolving macro environment we are focused on our ability to supply our technology-differentiated products and services to our customers which will allow us to maintain our organic growth momentum.
To date, we have had limited impact from supply shortages, and we have the ability to leverage our global supply chain network to securely source raw materials and drive competitive pricing. Additionally, we are leveraging our formulation technology expertise and artificial intelligence to optimize processes and products to drive reductions in our raw material costs and usage.
Considering our procurement capabilities, global footprint, formula flexibility and portfolio strengths, and assuming a macro environment with petrochemical feedstock prices at the spot price during April and May, the impact to PPG is expected to be a mid-single-digit percentage increase in the cost of goods sold for the remainder of the year.
We expect to fully offset these costs. We announced and are proactively raising selling prices as we work to secure raw materials for our customers, which is our top priority. Given the distribution models we have in place, we expect to deliver price realization much more rapidly than we did in previous inflation cycles. Importantly, there are areas where we anticipate potential upside to the second half of 2026 such as our growing aerospace business, our architectural coatings Latin America and Asia Pacific business where demand in Mexico has been strong and able to offset the weaker European environment in the architectural EMEA business. Additionally, industry demand in automotive refinish has been recovering faster than initially expected. As a result, we are maintaining our full-year earnings per share guidance range of $7.70 to $8.10.
Cash and short-term investments totaled
$1.6 billion and net debt totaled $5.5 billion at the end of the first quarter, which is about $150 million higher than the same quarter last year.
Cash generated from operating activities during the first quarter 2026 was $33 million, an increase of approximately $50 million year over year.
First quarter 2026 additional financial highlights:
The company repaid $700 million of debt which matured in the first quarter.
Restructuring actions from previously announced programs delivered about $20 million of incremental structural cost savings
Corporate expenses were $83 million
Net interest expense was $24 million
The effective tax rate was approximately 25.5%, up about 100 basis points year over year.
First quarter 2026 uses of cash included:
Capital expenditures were $196 million
Dividends paid were $159 million
Share repurchases were approximately $100 million. The company ended the quarter with $1.9 billion remaining on its current share repurchase authorization.
The company expects both second quarter organic sales and adjusted earnings per share in the range of flat to growth of a low single-digit percentage. We are maintaining our full-year earnings per share guidance range of $7.70 to
$8.10. This reflects the momentum of share gains and self-help actions, along with an updated view of current global economic activity, foreign exchange rates as well as regional and business mix.
The company provided financial assumptions for the second quarter in its accompanying presentation materials based on information that is currently known. A few of the assumptions are highlighted below.
Second quarter 2026 assumptions are as follows:
Adjusted earnings per share in the range of flat to an increase of a low single-digit percentage
Aggregate organic sales, the Global Architectural Coatings segment, the Performance Coatings segment, and the Industrial Coatings segment each in the range of flat to an increase of a low single-digit percentage
Aggregate segment EBITDA margin in the range of a decline 100 basis points to flat
Raw material inflation of a low single-digit percentage
Corporate expenses, of $85 million to $95 million
Net interest expense of $25 million to $30 million
Effective tax rate of approximately 24% to 25%
Additional information related to the first quarter 2026 financial information is posted within the slides and earnings release associated with the first quarter earnings documents on the investor section of the company's website.
The company is not able to provide a reconciliation of second quarter 2026 or full-year 2026 expected adjusted earnings per diluted share to the most directly comparable GAAP financial measure without unreasonable effort because certain items that impact such measure are uncertain or cannot be reasonably predicted at this time.
(a) Organic sales are defined as: net sales excluding the impact of currency, acquisitions and divestitures.
Statements contained herein relating to matters that are not historical facts are forward-looking statements reflecting PPG's current view with respect to future events and financial performance. These matters within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, involve risks and uncertainties that may affect PPG's operations, as discussed in the company's filings with the Securities and Exchange Commission pursuant to Sections 13(a), 13(c) or 15(d) of the Exchange Act, and the rules and regulations promulgated thereunder. Accordingly, many factors could cause actual results to differ materially from the forward-looking statements contained herein. Such factors include statements related to earnings guidance, global economic conditions, geopolitical issues, the amount of future share repurchases, increasing price and product competition by our competitors, fluctuations in cost and availability of raw materials, energy, labor and logistics, the ability to achieve selling price increases, margins, share gains, customer inventory levels, PPG inventory levels, the ability to maintain favorable supplier relationships and arrangements, the timing of realization of anticipated cost savings from restructuring and other initiatives, the ability to identify additional cost savings opportunities, the timing and expected benefits of potential future and completed acquisitions, difficulties in integrating acquired businesses and achieving expected synergies therefrom, economic and political conditions in international markets, the imposition and magnitude of tariffs, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions, global human health issues, the unpredictability of existing and possible future litigation, including asbestos litigation, and governmental investigations. However, it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here and in our 2025 Annual Report on Form
10-K are considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results compared with those anticipated in the forward-looking statements could include, among other things, lower sales or
earnings, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on PPG's consolidated financial condition, results of operations or liquidity.
All information in this release speaks only as of April 28, 2026, and any distribution of this release after that date is not intended and will not be construed as updating or confirming such information. PPG undertakes no obligation to update any forward-looking statement, except as otherwise required by applicable law.
Disclaimer
PPG Industries Inc. published this content on April 28, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 28, 2026 at 21:02 UTC.