PPG Industries’ Industrial Coatings segment in 1Q17

PPG Industries’ (PPG) Industrial Coatings segment is the second-largest revenue contributor for the company with a revenue share of 41% in 1Q17. The segment reported revenues of $1.5 billion in 1Q17, a 7% increase YoY (year-over-year).

The strong performance of the segment was primarily driven by the solid increase in sales volume along with the robust increase in acquisition-related sales. The sales volumes increased due to the continued growth in the automotive original equipment manufacturer coatings business.

What Drove PPG’s Industrial Coatings Segment Revenue in 1Q17?

On the other hand, foreign exchange translations adversely impacted the segment’s revenue by $20 million in 1Q17.

Net income and margin

The Industrial Coatings segment reported a net income of $273 million in 1Q17 as compared to $265 million in 1Q16, implying a 3% increase YoY. The segment reported a net income margin of 18.6% in 1Q17, a decrease of 70 basis points over the 1Q16 net income margin of 19.3%. The segment’s margin fell primarily due to lower margins from acquisition-related sales.

Segment outlook

The Industrial Coatings segment outlook remains positive for 2Q17 due to possible price increases across various businesses and regions. Plus, the expansion of the waterborne automotive coatings production line in Wuhu, China, is expected to begin operation in 2Q17 and contribute to the segment’s revenue. Acquisition-related sales are expected to rise $60 million–$70 million, while the foreign currency translations will likely continue to be a challenge.

Glass segment

PPG Industries’ third reporting segment is its Glass segment. In order to focus on its core coatings business, PPG divested its non-core European glass business in 2016. Presently, PPG’s glass segment operates only the North American fiberglass business. The segment reported revenue of $83 million for the quarter.

Investors can indirectly hold PPG Industries by investing in the ProShares Ultra Basic Materials (UYM), which had 3.4% of its total portfolio in PPG Industries on April 21, 2017. The top holdings of UYM include Dow Chemical (DOW), DuPont (DD), and Monsanto (MON) with weights of 8.5%, 8.3%, and 6.2%, respectively, on April 21, 2017.

In the next part, we’ll look into PPG Industries’ analyst recommendations.

Latest articles

Today, Canopy Growth announced that it acquired the Saskatchewan-based KeyLeaf Life Sciences along with entities relating to the company and its intellectual property. Here's what you need to know about the completed deal.

Yesterday, Tyson Foods (TSN) and fellow meat producers Pilgrim’s Pride (PPC) and Sanderson Farms (SAFM) took a hit to their stocks after news came out about an investigation over price-fixing allegations.

On June 24, RH (RH) was trading at $115.01, implying a rise of 21.2% since its announcement of its first-quarter earnings results on June 12. Despite the surge in its stock price, the company is still trading at a discount of 29.1% to its 52-week high.

26 Jun

Roku Stock Fell Close to 7.0% Yesterday

WRITTEN BY Aditya Raghunath

Roku stock fell 6.8% yesterday to close trading at $93.25 per share. Roku stock has lost over 9.0% in market value in the last two trading days. Prior to this pullback, Roku stock was up a whopping 235.0% year-to-date.

26 Jun

Beyond Meat Stock Up Today on New Product Launch

WRITTEN BY Rajiv Nanjapla

Today, Beyond Meat (BYND) announced that its new product, Beyond Beef, will hit markets across the US later this week.

FedEx (FDX) ended fiscal 2019 on a dismal note and reported a significant YoY decline in fourth-quarter earnings. The delivery giant posted adjusted EPS of $5.01, which was 15.2% lower than the year-ago quarter’s earnings of $5.91. The company cited sluggish revenue growth and increased expenses as the main reason behind the dismal bottom-line performance.