First-quarter revenue expectations
Analysts expect PPG Industries (PPG) to post revenues of $3.68 billion in its first-quarter earnings release. The estimates represent a decrease of 2.9% compared to the first quarter of 2018 when the company reported revenues of $3.79 billion. Sherwin-Williams’ (SHW) revenues are projected to increase 3.5%, while Axalta Coating Systems’ (AXTA) revenues are projected to decline 2.2%. RPM International (RPM) announced its third-quarter earnings in April and reported revenue growth of 3.4%.
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One of PPG Industries’ major concerns is the continued strength in the US dollar. The US Dollar Index measures the US dollar’s movement against the basket of currencies. The US Dollar Index has gained ~1.9% in the past six months—since the beginning of October 2018. Lower volumes will likely be another concern for PPG Industries. In the fourth quarter of 2018, the automotive original equipment manufacturer coatings sales volume decreased 5%. The trend is expected to continue. The architectural coatings Americas and Asia-Pacific region is also expected to continue its declining trend.
PPG Industries’ acquisition revenues could make up for some of these declining factors. In the past six months, PPG Industries has made several acquisitions. The company has increased the prices of several of its products. We’ll have to see how much the higher prices help to improve PPG Industries’ overall revenues. PPG Industries’ revenues might struggle to grow on a year-over-year basis.
Investors looking for indirect exposure to PPG Industries could invest in the iShares U.S. Basic Materials ETF (IYM), which has invested 4.25% of its portfolio in PPG Industries as of April 15.