What happened with PPG today?
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Uses news and trading volume to explain the day’s move and how it relates to the market.
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PPG Industries supplies coatings used to make, protect and repair vehicles, aircraft, industrial equipment and packaging. Industrial Coatings is its largest revenue segment; together with Performance Coatings, which serves repair, maintenance and selected manufacturing markets, it accounts for most sales. Manufacturers and repair businesses buy its products directly or through distributors. PPG also applies coatings and provides technical support, but services contribute only a small part of revenue.
Its architectural coatings business sells paint for building decoration and maintenance to painting contractors and consumers through stores, retailers and distributors. Brands include COMEX and TIKKURILA, and this business depends on its brands and distribution networks.
Raw materials are PPG’s largest production cost, and it buys most of them from outside suppliers. The business depends on obtaining these inputs and meeting customers’ requirements for performance and price. Chemical-product rules constrain which ingredients it can use and which customers and markets it can supply.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
PPG’s results hinge on global coatings demand and raw-material costs; Akzo Nobel and Nippon Paint are important competitors to watch beyond this list.
Sherwin-Williams competes with PPG for architectural paint and performance coatings customers across multiple markets, selling paint and coatings to professionals, manufacturers, businesses and consumers. Its Paint Stores Group sales offer clues to the architectural painting demand that also matters to PPG.
Axalta competes with PPG to supply repair shops with paint for repaired vehicles and manufacturers with coatings for new vehicles. Watch its repair-shop color-matching systems: they let shops reproduce vehicle colors regardless of brand, age or original-paint supplier, helping explain the competition PPG faces in refinish coatings.
RPM International, Inc. competes with PPG to sell protective coatings to customers maintaining industrial facilities and controlling corrosion, tying both to industrial maintenance demand. Watch demand for RPM’s industrial corrosion-control products, while keeping the overlap in perspective: RPM says it does not have a significant share of the worldwide protective coatings market.
Housing Starts (Sep)
New-home construction tracks homes being started, permitted or sold, and more building can bring PPG more demand for architectural paint and coatings used to decorate and maintain residences.
Expected1.31MLast release1.275M
If it comes in above expectations
If the reading is above the 1.31M estimate, it is above the previous 1.275M. More building can mean contractors and consumers buy more of PPG’s residential coatings, supporting sales; the effect depends on how much paint those projects require and buy from PPG.
If it comes in below expectations
Less building can mean contractors and consumers buy less of PPG’s residential coatings, weighing on sales; the effect depends on how much paint those projects would otherwise have required and bought from PPG.
PPG Industries, Inc. earningsThis company
PPG’s report will show whether sales across its architectural, performance and industrial coatings businesses are translating into higher segment income.
Compare sales with segment income—the operating profit measure PPG uses for its businesses—in each of the three segments, and read them alongside raw-material costs. Sales growth with stable or rising segment income would show that pricing, product mix or cost control is protecting profitability; sales growth with falling segment income would show that more sales are not producing better operating returns.
The Sherwin-Williams Company earningsSHW
Sherwin-Williams’ Paint Stores Group sales will show how demand from architectural-paint customers is changing in a market it shares with PPG.
Watch sales in Sherwin-Williams’ Paint Stores Group. Stronger sales would point to supported architectural-paint demand and a more favorable market for PPG’s architectural coatings; weaker sales would point to pressure in that shared market and a tougher setting for PPG.
Axalta Coating Systems Ltd. earningsAXTA
Axalta’s refinish-paint business and color-matching systems will show how it is competing for repair shops, a market it shares with PPG.
Watch demand for Axalta’s refinish coatings alongside repair shops’ adoption of its color-matching systems. Strength in both would show Axalta winning or holding shops’ business, increasing competitive pressure on PPG; weakness in both would point to less momentum for Axalta and less pressure on PPG.
Industrial Production MoM (Oct)
Industrial production tracks output from factories, mines and utilities; when it rises or falls, manufacturers’ production and purchases can change, affecting PPG’s sales of industrial, transportation, automotive OEM, packaging and aerospace coatings.
Read stronger factory, mine and utility output as a possible sign that PPG’s manufacturing customers will produce and buy more coatings; weaker output points to potentially lower production, purchases and sales.
