PPG Reports Second Quarter 2026 Earnings

PPG reported financial results for the second quarter 2026.

Second Quarter 2026 Consolidated Results

(a) From continuing operations

(b) Reconciliations of reported to adjusted figures are included below

Chairman and CEO Comments

Tim Knavish, PPG chairman and chief executive officer, commented on the quarter:

I am proud to announce that PPG delivered its sixth consecutive quarter of organic sales growth, a solid increase of 4%, with equal contributions from sales volumes and selling prices. We outpaced the industry by 300 basis points, achieving organic growth in all three segments and in eight of our nine businesses, demonstrating our ability to accelerate momentum in a complex and evolving environment. Adjusted EPS of $2.23 was slightly higher year over year driven by strong results in our differentiated aerospace and architectural coatings Latin America businesses, offsetting lower sales volumes in automotive refinish coatings.

Our Global Architectural Coatings segment achieved 2% organic sales growth and EBITDA margin improvement of 100 basis points led by strength in Latin America and modest growth in Europe. Long-term organic sales and margin expansion in this segment is driven by high-performance products, strong brand recognition, and cost control actions, along with excellent commercial execution.

Performance Coatings segment organic sales grew 3%, benefiting from strong demand for our aerospace and protective and marine coatings products. Margin declined year over year, driven by weaker automotive refinish coatings demand, as the recovery of insurance claims improved more gradually than anticipated. Automotive refinish coatings organic sales are projected to grow in the second half of the year in the range of a low to mid-single-digit percentage due to the phasing of PPG customer order patterns last year. Aerospace industry demand is expected to remain robust, and our technology-advantaged products position us well to deliver consistent above-industry growth in this key business.

In our Industrial Coatings segment, we are delivering on previously communicated share gains in all three businesses, resulting in sales volume growth of 5%. This performance was due to double-digit percentage growth in packaging coatings and mid-single-digit percentage growth in both automotive original equipment manufacturer (OEM) and industrial coatings. Price was flat for the quarter, following previous price declines, as we executed new pricing actions. Our ability to outpace industry growth is driven by technology leadership, investment in product innovation, and commercial excellence.

The company has proactively made price adjustments globally and across all of our businesses, resulting in a 2% selling price improvement in the quarter. Costs have risen for raw materials, energy, logistics and packaging across the coatings value chain. In the second quarter we covered about 90% of the cost of goods sold inflation and expect to cover 100% by the fourth quarter, one quarter ahead of our original commitment. This represents a faster rate of price realization than we achieved during previous cycles.

Looking ahead, we expect robust organic sales growth across most of our businesses in the third quarter, with aggregate growth in the low single-digit to mid-single-digit percentage range, led by strength in aerospace, Latin American architectural coatings, and packaging coatings. We are reaffirming our full-year earnings per share guidance range of $7.70 to $8.10. This demonstrates our confidence in our earnings trajectory given our positive momentum, realization of pricing, and execution of self-help actions.

Thank you to our PPG team around the world who make it happen and deliver on our purpose every day: We protect and beautify the world®.

Additional Financial Information

•       Net sales in the quarter increased 7% year over year, due to higher sales volumes of 2%, higher selling prices of 2%, positive foreign currency translation of 2% and acquisitions of 1%

•       At quarter end, the company had cash and short-term investments totaling $1.6 billion

•       Net debt was $5.3 billion, a decrease of $415 million from the second quarter 2025

•       In the second quarter, issued long-term bonds of CHF320 million due in 2030 and 2034, at a rate of 1.22% and 1.66%, respectively

•       Corporate expenses were $91 million in the second quarter, $83 million exclusive of depreciation and amortization

•       Second quarter net interest expense was $29 million

•       In the second quarter, the effective tax rate was 22.3% and the adjusted effective tax rate was 22.5%, down approximately 100 basis points year over year

Second Quarter 2026 Reportable Segment Financial Results

Global Architectural Coatings Segment

(a) Reconciliations of reported to adjusted figures are included below

Global Architectural Coatings segment net sales increased 8% compared to the second quarter 2025 driven by a benefit from foreign currency translation and organic sales growth of 2% due to higher selling prices, partially offset by lower sales volumes.

Organic sales for architectural coatings EMEA increased by a low single-digit percentage compared to the second quarter 2025, with higher selling prices partially offset by lower sales volumes. Organic sales for architectural coatings Latin America and Asia Pacific increased by a mid-single-digit percentage year over year driven by volume growth in Latin America and higher selling prices. In Mexico, retail sales were strong, and project-related sales improved compared to lower prior-year demand from local business and governmental investment. 

Segment EBITDA increased 14% and segment EBITDA margin improved 100 basis points compared to the prior year with realization of higher selling prices and cost-control actions partially offset by cost of goods sold inflation. In the third quarter, the company expects organic sales in the range of flat to a low single-digit percentage growth year over year and EBITDA margin to be relatively flat.

Performance Coatings Segment

(a) Reconciliations of reported to adjusted figures are included below

Performance Coatings segment net sales increased 7% due to higher selling prices, a benefit from foreign currency translation, and acquisitions.

Organic sales improved 3% compared to the prior year led by aerospace, protective and marine coatings, and traffic solutions, partially offset by year-over-year sales volume declines in automotive refinish coatings. Aerospace achieved exceptional quarterly sales with double-digit percentage organic sales growth, while our order backlog remained near $300 million. Organic sales in automotive refinish coatings decreased by a double-digit percentage as sales volumes were lower, reflecting both a challenging comparison to customer order patterns in the second quarter of 2025 and a slower recovery in underlying industry demand. Protective and marine coatings organic sales increased by a double-digit percentage compared to the prior year, achieving its 13th consecutive quarter of sales volume growth, including above-market marine sales volume growth in Asia Pacific and Europe. Organic sales in traffic solutions increased a mid-single-digit percentage driven by strong demand.

Compared to the second quarter 2025, segment EBITDA decreased by 5% and segment EBITDA margin declined 300 basis points, driven by lower automotive refinish coatings sales volumes. In the third quarter, the company expects organic sales growth in the range of a mid-single-digit percentage to a high single-digit percentage year over year. In the second half of 2026, we expect EBITDA margin expansion driven by pricing actions and automotive refinish stabilization.

Industrial Coatings Segment

(a) Reconciliations of reported to adjusted figures are included below

Industrial Coatings segment net sales increased 7% compared to the second quarter 2025, led by higher sales volumes and a benefit from foreign currency translation. Organic sales increased 5% due to sales volume growth in all three businesses, reflecting the benefits from share gains.

Automotive OEM coatings organic sales increased a low single-digit percentage, with mid-single-digit percentage sales volume growth, including share gains, outpacing global automotive industry production by about 500 basis points. Industrial coatings organic sales improved a mid-single-digit percentage driven by sales volume and selling price growth in Asia Pacific, Europe and North America. Packaging coatings organic sales increased by a double-digit percentage versus the prior year period and sales volumes were up over 20% on a two-year stacked basis, due to share gains as customers adopt our leading technologies.

Segment EBITDA increased 2% and segment EBITDA margin declined 70 basis points compared to the second quarter 2025. This margin decline was driven by cost of goods sold inflation partially offset by higher sales volumes. In the third quarter, the company expects organic sales in the range of flat to a low single-digit percentage growth year over year. In the second half of 2026, we expect EBITDA margin compression due to the timing of index-based pricing.

Outlook

The company expects third quarter organic sales growth in the range of a low single-digit to a mid-single-digit percentage and company adjusted EBITDA margin in the range of flat to a decline of 100 basis points year over year. We are reaffirming our full-year adjusted earnings per share guidance range of $7.70 to $8.10. This reflects the momentum of share gains and self-help actions, along with an updated view of global economic activity, foreign exchange rates as well as regional and business mix.

Additional information related to 2026 financial projections is posted within the slides associated with the second quarter earnings documents on the Investors section of PPG.com.

The term organic sales as used in this press release is defined as net sales excluding the impact of currency, acquisitions and divestitures.