PPG Industries (PPG.N) missed Wall Street's profit estimates for the third quarter, primarily due to weak demand in its industrial coatings unit. PPG Industries reported an adjusted profit of $2.13 per share for the July-September period, falling short of the anticipated $2.15.
The decline in U.S. new vehicle sales during the third quarter can be attributed to fewer selling days, reduced consumer spending, and higher interest rates. These factors have significantly impacted the demand for automotive coatings.
Factory production in the U.S. remained steady at lower levels in September, though there was some improvement in new orders. PPG, headquartered in Pittsburgh, Pennsylvania, is the largest coatings company globally, with a robust presence in paints, coatings, and specialty materials.
In the automotive OEM coatings segment, which supplies paints and adhesives to the auto industry, organic sales experienced a significant decline. Despite this, PPG's performance coatings segment saw sales rise compared to the previous year, largely driven by increased demand for aerospace coatings.
"Automotive OEM coatings organic sales decreased more than initially forecasted...due to lower U.S. and European industry build rates, which deteriorated notably late in the quarter. This was partly offset by PPG’s growth in China and Mexico," the company stated.
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PPG Industrie quarterly profit estimates due to weak demand in its industrial coatings unit, reporting adjusted profits lower than expected.
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