Net income from continuing operations for PPG hit $442 million. Selling prices rose by 1.3 percent while sales volumes fell about 5 percent from 2019, PPG reports. The company cites ongoing negative economic impacts from COVID-19 as a factor in its latest earnings.
“As reported earlier this month, we delivered record operating results in the third quarter, with both of our reportable business segments delivering higher segment income than the prior year, despite continued, negative pandemic-related economic effects,” says Michael H. McGarry, PPG chairman and chief executive officer. “Strong year-over-year organic sales growth in global architectural coatings and continued cost management drove earnings growth in our Performance Coatings reporting segment. In addition, our leading technology and service capabilities benefited us as demand for automotive OEM coatings and general industrial coatings began recovering in the quarter, generating strong PPG operating leverage and boosting earnings in our Industrial Coatings reporting segment.
McGarry says PPG’s operating margins were about 300 basis points higher than in 2019. In the third quarter, the company delivered roughly $90 million in cost savings from various initiatives and about $35 million in savings from business restructuring programs. In total, PPG generated more than $800 million of cash from operations in the third quarter.
“Looking ahead, we are likely to experience normal seasonal trends in the fourth quarter, especially in our European and North American architectural coatings businesses,” McGarry says. “Even with the continued uncertainty from the pandemic, we expect overall economic activity to continue to recover, but in an uneven manner. The pandemic is still significantly impacting the demand for certain coatings products—most notably, global commercial aerospace, marine, and protective coatings that support the oil and gas industry. In addition, we expect that automotive refinish coatings demand in the U.S. and Europe will remain below 2019 levels until there is a return to more normal commuting patterns.”