PPG Industries Inc. (NASDAQ: PPG) stock plunged at last close with a margin of 2.61% while during the after-hour session PPG stock price further declines by 5.73%. PPG Industries, Inc. is a Fortune 500 business based in the United States that manufactures paints, coatings, and specialty materials. It is the largest global coatings firm by revenue, backed by AkzoNobel.
PPG Industries has released its second quarter 2021 financial results. Given below is the summary:
- Net sales of over $4.4 billion in the second quarter set a new high, up 45 percent from the previous year.
- Earnings per diluted share (EPS) of $1.80 were reported, with adjusted EPS of $1.94.
- Sales volumes increased by roughly 24% year over year, owing to a robust rebound in demand across several end-use areas.
- Year-over-year cost inflation was in the mid-to-high teens due to widespread raw material supply interruptions.
- Additional pricing actions are being taken as well as a 3.5 percent rise in selling prices.
- During the quarter, PPG completed the purchases of Tikkurila, Wörwag, and Cetelon. Since December 2020, five acquisitions have been made, generating $1.7 billion in yearly revenue.
Michael H. McGarry, PPG chairman and chief executive officer stated,
PPG high organic sales increase reflects a partial rebound in demand following the pandemic, with above-market contributions across several of their businesses. However, many supply and component interruptions, such as those that affected their clients’ total production capabilities, slowed their volume increase substantially. Furthermore, despite significant underlying end-use customer demands, numerous coatings raw material limitations and transportation problems limited their ability to completely fill the current order book throughout the quarter. The recent acquisitions have also contributed to their excellent year-over-year sales increase, and they are performing well.
Furthermore, given current global economic activity, PPG made the following forecasts for the third quarter of 2021. Due to worldwide computer chip constraints, ongoing coatings raw material availability difficulties, and the near-term economic uncertainties linked with the pandemic’s prolonged impact, customers’ output limitations have been widened:
- When contrasted to the third quarter of 2020, total net sales, including purchases, is expected to increase by 21% to 23%, with organic revenue growth in the low single digits.
- Approximately $30 million in structural cost reductions through restructuring efforts year over year.
- In the second quarter, corporate costs were $52 million, and in the third quarter, they are projected to be about $60 million.
- $28 million to $30 million is anticipated as the total interest expense.
- PPG’s global effective tax rate is currently between 21% and 23%.
- Adjusted profits per diluted share for the full year are expected to range between $7.40 and $7.60.