10-Q · April 29, 2026
PPG Industries reported strong first-quarter results for 2026, with net sales of approximately $3.93 billion, marking a 7% increase year-over-year and exceeding revenue estimates of $3.84 billion. Although diluted EPS…
Earnings analysis · 10-Q
PPG earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
PPG posted Q2 revenue of $4.495 billion, up 7.2% year over year and 14.4% sequentially, but reported EPS declined 1.0% to $1.96 as material cost inflation and automotive-refinish volume weakness constrained earnings.…
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PPG posted Q2 revenue of $4.495 billion, up 7.2% year over year and 14.4% sequentially, but reported EPS declined 1.0% to $1.96 as material cost inflation and automotive-refinish volume weakness constrained earnings. Gross margin fell 180 basis points year over year to 40.2% and operating margin fell about 135 basis points to 14.1%, although both revenue and operating margin improved from Q1. Strong aerospace, packaging, protective/marine and architectural results, along with $592 million of six-month operating cash flow, offset pressure in automotive refinish and a $600 million decline in cash.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.96
What stood out
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Revenue grew 7.2% year over year
Q2 sales rose $300 million, or 7.2%, year over year to $4.495 billion, led by 2% higher volume, 2% pricing, 2% favorable FX and 1% acquisitions. Revenue also increased 14.4% sequentially from $3.925 billion in Q1 2026.
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Adjusted EPS edged higher despite flat GAAP EPS
Reported diluted EPS from continuing operations was $1.96 versus $1.98 a year ago, while adjusted EPS increased $0.01 to $2.23. Six-month reported EPS rose 1.4% to $3.66 and adjusted EPS increased 3.3% to $4.06.
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Architectural coatings profit accelerated
Global Architectural Coatings delivered the strongest profit growth: sales increased $80 million to $1.098 billion and segment income climbed $25 million, or 15.6%, to $185 million. Favorable FX contributed 6 percentage points of segment sales growth.
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Industrial volumes and share gains supported sales
Industrial Coatings sales increased $113 million, or 6.8%, to $1.778 billion, with volume contributing 5 percentage points. Automotive OEM volume growth outpaced declining global auto production by about 500 basis points, while packaging sales grew double digits.
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Operating cash flow improved materially
Six-month operating cash flow increased $223 million to $592 million, versus $369 million a year earlier, principally from improved working-capital performance. Operating working capital/sales improved to 18.2% from 19.4% a year earlier.
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Management expects broad Q3 organic growth
Management expects Q3 organic growth in all three segments, ranging from flat-to-low-single-digit in Architectural and Industrial to mid-to-high-single-digit in Performance Coatings. It also expects price and productivity actions to offset 100% of cost-of-goods-sold inflation by Q4 2026.
What to watch
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Automotive refinish weakness pressured margins
Performance Coatings segment income fell $27 million, or 7.6%, to $329 million despite 7.1% sales growth, as automotive refinish organic sales declined by a double-digit percentage and cost inflation persisted.
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Cost inflation compressed year-over-year margins
Company gross margin declined to 40.2% from 42.0% a year ago as cost of sales rose 10.5%, faster than the 7.2% sales increase. Operating margin was about 14.1%, down from 15.5% in Q2 2025, although up from 13.4% in Q1 2026.
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Cash declined and working-capital balances rose
Cash and short-term investments declined $600 million to $1.6 billion from $2.2 billion at December 31, 2025. Trade receivables increased $725 million to $3.508 billion, inventories rose $234 million to $2.411 billion, and days sales outstanding increased to 63 from 59.
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Brazil litigation award remains a contingent risk
The filing reports no material changes to risk factors from the 2025 Form 10-K, but legal exposure remains notable: a Brazilian award against PPG could be approximately $350 million under simple prejudgment interest, while PPG states the risk of loss is remote and expects a final trial-court decision in 2026.
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FX exposure increased with foreign-currency debt
Foreign-exchange and debt sensitivity increased with non-U.S.-dollar borrowings of $4.4 billion at June 30, 2026 versus $4.1 billion at year-end. A specified weakening of the U.S. dollar could produce $489 million of unrealized translation losses, versus $457 million at December 31, 2025.
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Environmental and legal costs increased
Environmental and legal charges totaled $36 million in Q2 2026, comprising $25 million of legacy remediation charges and an $11 million legal settlement; cash environmental remediation outlays were $18 million in the first six months, versus $10 million a year ago.
Management's outlook
The 10-Q provides no numeric company-wide revenue or EPS outlook. For Q3, segment organic sales are expected to be flat to low-single-digit growth in Global Architectural Coatings, mid- to high-single-digit growth in Performance Coatings, and flat to low-single-digit growth in Industrial Coatings. Management anticipates selling prices and productivity will offset 100% of cost-of-goods-sold inflation by Q4 2026; 2026 capital spending is expected at $650 million-$700 million.
Earlier filings 4
10-Q · April 30, 2025
PPG reported quarterly net sales of $3,684 million (down $165 million vs. Q1 2024's $3,849 million) and diluted earnings per share attributable to PPG of $1.63 (down $0.07 vs. $1.70 in Q1 2024). Gross-profit dollars…
10-Q · October 17, 2024
PPG reported Q3 net sales of $4,575 million, down $69 million (‑1.5%) versus Q3 2023, but delivered margin expansion and higher earnings: diluted EPS was $2.00 (vs. $1.79) and net income attributable to PPG was $468…
10-Q · July 19, 2024
PPG reported Q2 net sales of $4,794 million (down $78 million vs Q2 2023) with net income attributable to PPG of $528 million and diluted EPS of $2.24. Gross profitability and operating margin improved versus the…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.