PPG Industries Misses Earnings Estimates Amid Weak Demand and Declining Prices
PPG Industries (NYSE: PPG) reported below-par earnings for the fourth quarter of 2022, primarily attributed to reduced demand for its industrial and architectural coatings products and unfavorable pricing dynamics.
The surge in mortgage rates in the United States negatively impacted the homebuilding sector, which had earlier capitalized on the shortage of available pre-owned homes. Consequently, the demand for construction materials, including paint and coatings, witnessed a decline, adversely affecting PPG's profitability.
Furthermore, the industrial coatings segment experienced a sales decline to $1.58 billion during the October-December quarter, down from $1.73 billion in the corresponding period a year prior. This decline aligns with the persistent trend of year-over-year reductions in industrial production in the United States and Europe.
The company's overall net sales dipped by 5% to $3.7 billion in the fourth quarter. "We project a sluggish start to 2023, given the ongoing challenges in demand from Europe and global industrial end-use markets," stated CEO Tim Knavish.
Based on data from LSEG, PPG Industries' adjusted earnings per share (EPS) for the quarter ended December 31, 2022, amounted to $1.61, falling short of analysts' projections of $1.65 per share.