FILE PHOTO: A PPG Industries precipitated silicas plant is pictured in West Lake, Louisiana, U.S., June 12, 2018. REUTERS/Jonathan Bachman
(Reuters) – PPG Industries Inc (NYSE:PPG) on Thursday surpassed street estimates, as the industrial coatings supplier accelerated its margin recovery on the back of higher prices and sales volumes, and forecast better-than-expected full-year 2023 earnings.
The reopening of the Chinese economy after pandemic-induced lockdowns boosted demand for coatings used in aerospace and automotive original equipment manufacturers (OEMs).
Net sales in the performance coatings segment rose 2% to $2.63 billion from $2.57 billion a year earlier as higher selling prices made up for an unfavorable foreign currency translation and the hit from winding down business in Russia.
The industrial coatings segment also saw net sales rise, by about 1%, to $1.75 billion from $1.74 billion a year earlier as sales in automotive OEM coatings were higher.
Demand for chemicals, however, is recovering slowly in areas such as durables and construction, brokerage KeyBlanc Capital Markets had written in a note earlier this month.
The Pittsburgh, Pennsylvania-based company’s earnings rose to $1.82 per share in the quarter ended March 31 from $1.37 per share a year earlier, higher than analysts’ estimate of $1.54 per share according to data from Refinitiv.
Quarterly net sales rose 2% to $4.38 billion from $4.31 billion a year earlier. Analysts had expected $4.39 billion.
The company expects sales volumes to be close to pre-pandemic levels in the second quarter of this year and sees earnings between $2.05 per share and $2.15 per share, higher than street estimate of $1.96 per share.
PPG’s full-year 2023 earnings forecast between $6.95 per share and $7.25 per share was also higher than analysts’ estimate of $6.90.
Paint makers such as PPG Industries had passed a chunk of steep raw material costs on to customers last year via higher prices, but warned of waning sales volumes this year.
Shares rose 1.8% in after-hours trading to $144.