PPG Industries Inc. Forecasts Global Demand Shifts

PPG Industries Inc., a leading manufacturer of paints and coatings for various industries, expects the U.S. economy to remain sluggish in the first half of the year. However, the company anticipates a surge in demand for its products in China and Mexico.

Global Industrial Production Remains Low

PPG acknowledges that overall global industrial production continues to operate at low levels. Despite this, the company is optimistic about specific regions.

China and Mexico Show Promise

PPG projects ongoing improvement in its business operations in China. Additionally, it foresees economic stability in Europe at its current levels by 2024. As for Mexico, PPG's second-largest market by total net sales, it anticipates a continuation of strong momentum.

Sales in North America

PPG reports that sales of architectural coatings in the U.S. and Canada were lower in the fourth quarter due to weak do-it-yourself demand. Although growth in sales to contractors partially offset the decline, overall sales were negatively impacted.

Fourth Quarter Performance

PPG exceeded analyst expectations in its fourth-quarter results. However, the stock experienced a 1% decline in the extended session due to a lower-than-anticipated outlook for the first quarter.

For the fourth quarter, PPG achieved adjusted earnings of $1.53 per share on sales of $4.4 billion, a 4% increase year over year. This surpassed the analyst consensus estimate for adjusted earnings of $1.49 per share on sales of $4.3 billion.

Forecasts for Q1 and Fiscal Year 2024

PPG predicts adjusted earnings between $1.80 and $1.87 per share for the first quarter of the year. In addition, the company forecasts adjusted EPS between $8.34 and $8.59 for fiscal year 2024.

According to FactSet, the consensus among analysts is for adjusted EPS of $1.98 for the first quarter and $8.47 for the entire year.

Share Performance

Over the past 12 months, PPG's shares have gained 13%. In comparison, the S&P 500 index has risen approximately 21% during the same period.