PPG Industries (NYSE:PPG) reported record third-quarter earnings for 2026, supported by organic sales growth, pricing actions and strength in its Aerospace and Architectural Coatings Latin America businesses.
Net sales increased 7% year over year to $4.4 billion, while organic sales rose 5%, including 2% volume growth. Adjusted earnings per share increased 6% to a third-quarter record of $2.25, and adjusted EBITDA margin exceeded 18%, Chairman and CEO Tim Knavish said during the company’s earnings call.
Knavish said the quarter marked PPG’s seventh consecutive period of organic sales growth and that the company outpaced its industry by 300 basis points. He also said commercial actions fully offset cost-of-goods-sold inflation during the quarter, reaching companywide neutrality within six months.
Segment Results
Global Architectural Coatings recorded net sales of approximately $1.1 billion, up 4% from a year earlier. Organic sales rose 2%, as higher selling prices across all regions offset lower European volumes. Mexico delivered robust retail sales, while project-related sales grew moderately as foreign direct investment sequentially recovered, according to Knavish.
Architectural Coatings Latin America and Asia-Pacific organic sales increased by a mid-single-digit percentage, driven by pricing and Latin American volume growth. In Europe, organic sales rose by a low-single-digit percentage as pricing more than offset lower volumes. Segment EBITDA increased 19%, while EBITDA margin expanded 300 basis points to 24%.
Knavish said margin performance reflected pricing, volume and mix in Mexico, pricing in Europe, and European cost-reduction efforts. He added that a stronger Mexican peso provided some benefit during the quarter, though it was not the primary driver of the year-over-year earnings improvement.
Performance Coatings net sales grew 10% to $1.6 billion, with organic sales up 8% and volume up 5%. Aerospace posted double-digit organic sales growth and maintained an order backlog near $300 million. Automotive Refinish organic sales increased by a mid-single-digit percentage, supported by both volume and pricing.
PPG’s Protective and Marine Coatings business delivered high-single-digit organic growth, extending its volume-growth streak to 14 consecutive quarters. The company cited above-market marine volume growth in Asia-Pacific, supported by its technology offerings. Segment EBITDA increased 21%, and margin expanded 220 basis points to 23.9%.
Industrial Coatings net sales rose 5% to about $1.7 billion, while organic sales increased 4%, evenly split between price and volume. Industrial Coatings posted high-single-digit organic growth, including double-digit growth in powder coatings, while Packaging Coatings generated double-digit organic sales growth. Packaging volumes were up more than 20% on a two-year stacked basis.
Automotive OEM Coatings organic sales declined by a low-single-digit percentage because of lower industry production, although PPG said it outperformed global automotive production. Industrial segment EBITDA declined 11%, and EBITDA margin fell 260 basis points to 14.4%, as cost inflation moved ahead of the timing of index-based pricing mechanisms.
Aerospace Investment and Cash Deployment
PPG expects Aerospace sales to exceed $2 billion this year. Knavish said the company is investing more than $500 million to expand capacity and improve productivity in the business. That figure includes a recently announced $70 million expansion of aerospace transparencies operations in Huntsville, Alabama, intended to increase capacity for cockpit and passenger windows.
The company ended the quarter with $1.6 billion in cash and short-term investments. Net debt was $5.2 billion, down approximately $200 million from the prior-year quarter, while net leverage declined to 1.8 times net debt to adjusted EBITDA.
Year-to-date operating cash flow totaled approximately $1.2 billion, about $100 million above the prior year. PPG repurchased about $150 million of shares in the quarter, bringing year-to-date repurchases to $320 million, and paid more than $480 million in dividends during the first nine months.
Fourth-Quarter Outlook
For the fourth quarter, PPG expects total organic sales growth of a low-single-digit percentage and adjusted EBITDA margin to range from flat to up 100 basis points year over year. The company expects high-single-digit cost-of-goods-sold inflation in the period and intends to address it through pricing actions.
- Global Architectural Coatings organic sales are expected to range from flat to up a low-single-digit percentage.
- Performance Coatings organic sales are expected to increase by a low- to mid-single-digit percentage.
- Industrial Coatings organic sales are expected to range from down a low-single-digit percentage to up a low-single-digit percentage.
Knavish said reduced automotive-build forecasts, particularly in China, are the main reason for a more modest Industrial Coatings outlook. He said index-based pricing started to provide some benefits in the third and fourth quarters, but most of the benefit is expected in the first and second quarters of 2027 because of contract structures.
PPG raised the midpoint of its full-year adjusted EPS outlook and narrowed its projected range to $7.90 to $8.10 per share.
Looking Ahead
Management declined to provide detailed 2027 guidance, saying it was too early amid demand, geopolitical and inflation uncertainty. However, Knavish said the company expects organic growth and margin expansion to continue based on its commercial pipeline, pricing catch-up in certain businesses, and productivity and restructuring actions.
He said PPG expects roughly $100 million in combined restructuring and productivity benefits across 2026 and 2027. In Architectural Coatings EMEA, the company expects a significant share of restructuring benefits to come from four previously announced plant closures, with the larger impact expected during the first half of 2027.
About PPG Industries (NYSE:PPG)
PPG Industries, Inc is a global manufacturer of paints, coatings and specialty materials. The company develops products designed to protect, decorate and improve the performance of surfaces and components used in transportation, construction, manufacturing and consumer products.
Its product portfolio includes automotive and commercial vehicle coatings, aerospace coatings, industrial and protective coatings, architectural paints, packaging coatings, and coatings used in marine and other specialty applications.
