PPG Q3 Adjusted EPS Hits Record as Organic Sales Rise 5%

PPG reported record third-quarter adjusted earnings as organic sales increased across all three operating segments, led by aerospace and other performance coatings businesses. The coatings maker also said it raised the midpoint of its full-year adjusted earnings guidance, which now calls for adjusted earnings per diluted share of $7.90 to $8.10.

Net sales rose to $4.353 billion from $4.082 billion a year earlier. Organic sales increased 5%, marking a seventh consecutive quarter of year-over-year growth, as selling prices rose 3% and volumes increased 2%. PPG said share gains contributed to growth, while commercial actions fully offset cost-of-goods-sold inflation.

Adjusted earnings per diluted share reached a third-quarter record of $2.25, up 6% from $2.13 a year earlier. Reported income from continuing operations was $473 million, or $2.12 per diluted share, compared with $444 million, or $1.96 per share, in the prior-year period.

Adjusted EBITDA increased to $793 million from $742 million, while the adjusted EBITDA margin held at 18.2%. The company’s adjustments included acquisition-related amortization, restructuring costs, a tax-related charge, portfolio optimization items and an insurance recovery.

Performance Coatings leads growth

Performance Coatings generated the strongest organic expansion, with sales rising 8% and reported revenue increasing to $1.554 billion from $1.414 billion. Aerospace posted its 22nd consecutive quarter of organic sales growth, while automotive refinish recorded higher selling prices and volumes. Protective and marine coatings benefited from marine share gains in Asia Pacific.

The segment’s EBITDA margin expanded 220 basis points to 23.9%, reflecting aerospace growth and improved comparisons in automotive refinish. PPG expects further year-over-year margin expansion in the fourth quarter, supported by execution and business mix.

PPG is also investing $70 million between 2025 and 2029 to expand its aerospace transparencies facility in Huntsville, Alabama. The 112,000-square-foot expansion is intended to add capacity for aircraft cockpit and passenger windows, improve operating efficiency and support demand across commercial, general aviation and military markets.

Architectural margins rise, industrial margins contract

Global Architectural Coatings reported organic sales growth of 2%, driven by strength in Mexico, including retail and project-related demand. European organic sales were positive because of pricing, although demand varied by country. Segment revenue rose to $1.055 billion from $1.012 billion.

The segment’s EBITDA margin increased 300 basis points to 24.0%, aided by productivity and pricing that exceeded cost-of-goods-sold inflation. PPG expects fourth-quarter organic sales growth led by Mexico and another year-over-year increase in the segment’s EBITDA margin.

Industrial Coatings organic sales increased 4%, with reported revenue rising to $1.744 billion from $1.656 billion. Volumes grew across Asia Pacific, Europe and North America. Packaging coatings benefited from technology-related share gains, while automotive original-equipment coatings volumes outpaced industry demand, according to the presentation.

Industrial Coatings’ EBITDA margin fell 260 basis points to 14.4%. PPG attributed the decline to cost inflation that was only partly offset because of a lag in index-based pricing. The company expects the pace of margin compression to be sequentially lower in the fourth quarter as productivity initiatives take effect.

Cash deployment and outlook

Year-to-date operating cash flow was approximately $100 million above the prior-year level. PPG returned about $800 million to shareholders through dividends and share repurchases during the first nine months, including roughly $150 million of repurchases in the third quarter.

At September 30, PPG had $1.6 billion of cash, cash equivalents and short-term investments, along with $5.2 billion of net debt. Net debt was 1.8 times last-12-month adjusted EBITDA. The company projects 2026 capital expenditures of $650 million to $700 million and restructuring savings of $50 million.

For the fourth quarter, PPG expects company adjusted EBITDA margin to range from flat to 100 basis points higher year over year and cost-of-goods-sold inflation to remain in the high-single-digit range. The outlook remains subject to economic and geopolitical conditions, competitive pricing, raw-material and logistics costs, tariffs, foreign-exchange movements, customer production and inventory levels, and the timing of restructuring savings and acquisition benefits.