Fourth-quarter revenue expectations
Wall Street analysts expect PPG Industries (PPG) to post revenues of $3.65 billion in its fourth-quarter earnings release. The estimates represent a decrease of ~0.8% compared to the fourth quarter of 2017 when the company reported revenues of $3.68 billion. Sherwin-Williams (SHW) and Axalta Coating Systems (AXTA) are projected to increase 4.9% and 0.4%, respectively. RPM International (RPM) reported revenue growth of 3.6% in its earnings for the second quarter of fiscal 2019.
As we mentioned above, PPG Industries’ revenue growth is expected to remain flat. The sales volumes are expected to be lower due to weaker demand in architectural coatings in the Americas and Asia-Pacific. There could be a negative impact on revenues due to Lowe’s discontinuing OLYMPIC brand paints. The stronger dollar is also expected to have a negative impact on PPG Industries’ sales. The US Dollar Index, which measures the dollar’s movement against the basket of currencies, gained ~1.8% on July 1–December 31.
PPG Industries’ continued action to increase the product price could offset some of the negatives. However, higher product prices might not be enough to improve PPG Industries’ revenues. Acquisition revenues should boost PPG Industries’ revenues.
Investors could hold PPG Industries indirectly by investing in the Materials Select Sector SPDR Fund (XLB). XLB has invested 4.3% of its portfolio in PPG Industries as of January 15.