PPG Industries Q2 Earnings Call Highlights

PPG Industries (NYSE: PPG) reported second-quarter net sales of $4.5 billion, up 7% from a year earlier, as the coatings maker recorded its sixth consecutive quarter of organic sales growth. Organic sales rose 4%, with sales volumes and selling prices contributing equally, Chairman and CEO Tim Knavish said on the company’s earnings call. Adjusted earnings per share were $2.23, slightly above the prior-year period. Knavish said strong results in Aerospace and Architectural Coatings Latin America helped offset expected lower volumes in Automotive Refinish. Company adjusted EBITDA margin exceeded 17% during the quarter.

PPG said it covered approximately 90% of cost-of-goods-sold inflation through pricing in the second quarter and now expects to achieve full coverage by the fourth quarter, one quarter earlier than its prior target. The company cited rising raw material, energy, logistics and packaging costs across the coatings supply chain following the Iran War.

Segment results reflect aerospace and industrial momentum Global Architectural Coatings sales increased 8% to $1.1 billion. Organic sales rose 2%, driven by higher selling prices that were partly offset by modestly lower volume. Latin America and Asia-Pacific posted mid-single-digit organic sales growth, while EMEA returned to positive organic sales growth at a low-single-digit rate. Segment EBITDA increased 14%, and margin expanded 100 basis points to 19.4%. Knavish said European pricing and cost actions produced a return to margin expansion following several quarters of contraction. For the third quarter, PPG expects the segment’s organic sales to range from flat to up a low-single-digit percentage, while EBITDA margin is expected to be relatively flat year over year.

Performance Coatings sales rose 7% to $1.6 billion, while organic sales increased 3%. Aerospace posted double-digit sales growth and maintained an order backlog of about $300 million. Protective and Marine Coatings also grew at a double-digit rate, marking its 13th consecutive quarter of sales-volume growth, and Traffic Solutions grew at a mid-single-digit rate. Automotive Refinish organic sales, however, declined by a double-digit percentage, reflecting difficult comparisons with customer order patterns in the second quarter of 2025 and a still-modest industry recovery. Performance Coatings EBITDA margin fell 300 basis points to 22.7%, a decline Knavish said was driven almost entirely by the Automotive Refinish comparison. Management said it expects Automotive Refinish to return to growth in both the third and fourth quarters, with U.S. destocking now behind the business. Knavish also pointed to improving insurance-market indicators, including a low-single-digit year-over-year decline in auto insurance premiums during the second quarter, the first such quarterly decline in five years.

Industrial Coatings sales grew 7% to $1.8 billion, with organic sales up 5% on volume gains in all three businesses. Automotive OEM Coatings grew at a low-single-digit rate, including mid-single-digit volume growth and share gains that outpaced global auto production by approximately 500 basis points. Packaging Coatings posted double-digit organic sales growth, with volumes up more than 20% on a two-year stacked basis. Industrial Coatings EBITDA increased 2%, though margin declined 70 basis points to 15.9% because of cost inflation. PPG expects modest organic growth and margin compression for the segment in the second half, citing the timing of index-based pricing. Aerospace investment and share-gain focus Knavish highlighted aerospace as a major growth engine, describing PPG’s roug...