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PPG Industries Inc.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 28 April 2026: press release. Guidance figures: 3 kept. The quarter’s numbers.

Key takeaways

  • Net sales rose 7 percent: Net sales were $3.9 billion, up 7%. Selling prices added 1% and currency translation added 6%, while organic sales rose 1%. Source
  • Adjusted EPS rose 6 percent: Reported diluted EPS was $1.70 and adjusted EPS was $1.83, up 6%. Adjusted figures exclude acquisition amortization, restructuring costs, portfolio items and an insurance recovery. Source
  • Architectural sales rose 13%: Global Architectural Coatings net sales were $965 million, up 13%. Currency added 12%, selling prices 2%, and divestitures reduced sales by 1%; volumes were flat. Source
  • Aerospace sales grew double digits: Aerospace organic sales grew at a double-digit percentage rate. The aerospace order backlog was about $315 million. Source
  • Industrial EBITDA fell 7%: Segment EBITDA decreased 7% to $245 million and margin declined 180 basis points to 15.0%, driven by regional mix and lower selling prices on index-based contracts. Source
  • Price increases announced globally: PPG announced price adjustments globally and across its portfolio in response to the cost increases. Source
  • Second-quarter guidance held steady: Second-quarter organic sales and adjusted EPS are expected to be flat to up a low single-digit percentage, unchanged from the April 15 release. Source
  • Full-year EPS range kept: Full-year 2026 EPS guidance of $7.70 to $8.10 was maintained, reflecting an updated view of global economic activity, exchange rates and regional and business mix. Source

“In the first quarter, PPG delivered organic sales growth of 1%, demonstrating our ability to maintain growth momentum in a challenging environment.”

Tim Knavish, PPG chairman and chief executive officer

Guidance

AreaPeriodFigureAgainst last quarter
Organic sales growth Sourcesecond quarter 2026flat to growth of a low single-digit percentageKept
Adjusted EPS Sourcesecond quarter 2026flat to growth of a low single-digit percentageKept
EPS Sourcefull-year 2026$7.70 to $8.10Kept

What changed from last quarter

  • Guidance kept: Second-quarter organic sales and adjusted EPS guidance kept at flat to low single-digit growth, as in the April 15 release.
  • Guidance kept: Full-year 2026 EPS guidance range of $7.70 to $8.10 maintained in the April 28 release. Source
  • New: PPG announced price adjustments globally and across its portfolio after recent cost increases. Source

Results and growth drivers

  • Net sales rose 7 percent: Net sales were $3.9 billion, up 7%. Selling prices added 1% and currency translation added 6%, while organic sales rose 1%. Source
  • Adjusted EPS rose 6 percent: Reported diluted EPS was $1.70 and adjusted EPS was $1.83, up 6%. Adjusted figures exclude acquisition amortization, restructuring costs, portfolio items and an insurance recovery. Source
  • Organic growth came from pricing: Organic sales rose 1%, with higher selling prices as the stated driver. Management said price realization is targeted to offset inflation more quickly than prior cycles. Source
  • Segment margins at 16% and 19%: Segment margin was 16% and segment EBITDA margin 19%. Segment EBITDA was $755 million, against $714 million a year earlier. Source

Architectural coatings segment

  • Architectural sales rose 13%: Global Architectural Coatings net sales were $965 million, up 13%. Currency added 12%, selling prices 2%, and divestitures reduced sales by 1%; volumes were flat. Source
  • Architectural EBITDA margin up 230 basis points: Segment EBITDA rose 28% to $184 million and margin improved to 19.1%, with higher selling prices and cost-control actions cited as drivers. Source
  • EMEA declined; Latin America grew: Organic sales in Latin America and Asia Pacific rose a mid-single-digit percentage, led by Latin America. EMEA organic sales fell a low single-digit percentage. Source
  • Mexico retail and projects recovering: In Mexico, retail sales were especially strong, and project-related sales continued to recover. Management expects further improvement in the second quarter. Source

“Looking ahead, we expect strong growth in aerospace, architectural coatings in Latin America, protective and marine coatings and packaging coatings.”

Tim Knavish, PPG chairman and chief executive officer

Performance coatings segment

  • Performance sales rose 5%: Performance Coatings net sales were $1.33 billion, up 5%. Selling prices added 3%, currency 3% and acquisitions 1%, while volumes fell 2%. Organic sales rose 1%. Source
  • Aerospace sales grew double digits: Aerospace organic sales grew at a double-digit percentage rate. The aerospace order backlog was about $315 million. Source
  • Automotive refinish volumes fell: Automotive refinish organic sales fell a double-digit percentage on lower volumes, against a comparison with 2025 order patterns weighted to the first half. Source
  • Protective and marine volume growth: Protective and marine coatings organic sales rose a high single-digit percentage, and traffic solutions organic sales rose a high single-digit percentage on U.S. and Canada demand. Source
  • Performance EBITDA rose 6%: Segment EBITDA rose 6% to $326 million and margin was 24.4%. Higher selling prices were partly offset by lower refinish volumes and growth investment in aerospace and protective and marine. Source

Industrial coatings segment

  • Industrial sales rose on currency: Industrial Coatings net sales rose 4% to $1.63 billion, driven by currency. Organic sales were flat, with volumes up 1% and selling prices down 1% on index-based contracts. Source
  • Industrial EBITDA fell 7%: Segment EBITDA decreased 7% to $245 million and margin declined 180 basis points to 15.0%, driven by regional mix and lower selling prices on index-based contracts. Source
  • China auto output drop hit margins: Management said margins were affected by regional mix, as China automotive production fell from a high level a year earlier. Automotive OEM organic sales fell a low single-digit percentage, about 300 basis points better than global production. Source
  • Packaging coatings grew double digits: Packaging coatings organic sales rose a double-digit percentage, and volumes were up over 20% on a two-year stacked basis from share gains. Source
  • Industrial demand soft in U.S.: Industrial coatings organic sales fell a low single-digit percentage on soft U.S. demand, which was offset by growth in other regions. Source

“Aerospace industry growth is expected to remain robust, and our order backlog positions us well to deliver consistent above-industry growth in this key end market.”

Tim Knavish, PPG chairman and chief executive officer

Pricing and cost inflation

  • Raw material and energy costs rose: Management said raw material, energy, logistics and packaging costs have risen across the coatings value chain in recent weeks. Source
  • Price increases announced globally: PPG announced price adjustments globally and across its portfolio in response to the cost increases. Source
  • Pricing offsets inflation, management said: Management said PPG can source raw materials globally and raise selling prices in step with input costs, an improvement on prior inflation cycles. Source

Second-quarter and full-year guidance

  • Second-quarter guidance held steady: Second-quarter organic sales and adjusted EPS are expected to be flat to up a low single-digit percentage, unchanged from the April 15 release. Source
  • Full-year EPS range kept: Full-year 2026 EPS guidance of $7.70 to $8.10 was maintained, reflecting an updated view of global economic activity, exchange rates and regional and business mix. Source
  • Self-help and share gains cited: Management said the guidance reflects share gains, realized pricing and self-help actions, which it expects to mitigate raw material inflation. Source

Cash, debt and shareholder returns

  • Operating cash flow $33 million: Cash from operating activities was $33 million, about $50 million higher than a year earlier. Source
  • Net debt up $150 million: Net debt was $5.5 billion, up $150 million from the first quarter 2025. Source
  • Repaid $700 million of maturing debt: The company repaid $700 million of debt that matured in the first quarter. Cash and short-term investments totaled $1.6 billion at quarter end. Source
  • Share repurchases about $100 million: Share repurchases totaled about $100 million in the quarter. Cash paid for treasury stock was $96 million, against $394 million a year earlier. Source
  • Capital expenditures $196 million: Capital expenditures were $196 million, against $209 million a year earlier. Source
  • Dividends paid $159 million: Dividends paid on common stock were $159 million, against $154 million a year earlier. Source

Working capital, tax and corporate costs

  • Working capital rose to 20%: Operating working capital was $3,138 million, 20.0% of annualized quarter sales, up from 17.6% at December 31, 2025 and 19.3% a year earlier. Source
  • Effective tax rate up about 100 basis points: The effective tax rate was approximately 25.5% in the first quarter, up about 100 basis points year over year. Source
  • Corporate costs and net interest: Corporate expenses were $83 million in the first quarter and net interest expense was $24 million. Source
  • Average diluted shares fell: Average diluted shares were 224.4 million, down from 228.9 million a year earlier. Source

Coming up, as management said on 28 April 2026

  • Refinish sales expected to improve: Automotive refinish organic sales are expected to improve in the second half, tied to the phasing of 2025 customer order patterns. Source

Figures management reported

FigureReported
Aerospace order backlog Sourceabout $315 million
Protective and marine coatings sales volume growth Source12th consecutive quarter
Packaging coatings sales volumes, two-year stacked Sourceup over 20%

Risks management discussed

  • Operational: Management named raw material, energy, logistics and packaging cost increases as a pressure that pricing and self-help are expected to offset. Source
  • Demand: Management described demand in Europe as mixed, while Mexico project sales recovered and retail sales were especially strong. Source
  • External: Management cited lower China automotive production, compared with a high level a year earlier, as a factor affecting regional mix. Source

Earlier plans management reported on

  • Ahead: Management said first-quarter segment EBITDA margin was above its original expectations, as reported in the April 15 release.
  • On track: Management said it is delivering on previously communicated share gains in automotive OEM and packaging coatings. Source
  • Not stated: Management said it is maintaining the full-year EPS guidance range of $7.70 to $8.10. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.