PITTSBURGH — PPG (NYSE:PPG) today announced that it expects third quarter 2022 adjusted earnings per diluted share to be between 5% and 7% below the low end of the company’s forecasted range of $1.75 to $2.00 that was previously communicated in July.
In comparison to its forecast at the beginning of the third quarter, company sales were impacted by further softening demand in Europe. In addition, sequential quarterly demand recovery was lower than expected in China due to a resumption of certain pandemic-related restrictions. The sales volume declines were most pronounced in September and resulted in a reduction in the earnings benefit from higher selling prices and reduced manufacturing efficiencies versus the prior forecast.
Softer demand conditions are expected to continue into the fourth quarter along with continued higher levels of unfavorable foreign currency translation impact. Raw material cost inflation remains at historically elevated levels but has begun to moderate in some regions. The company is expecting selling prices to be up by between 10% and 12% compared to the prior-year fourth quarter, and up between 18% and 20% on a two-year stacked basis. The company anticipates fourth quarter year-over-year segment earnings growth of near 20%, as year-over-year segment margin recovery momentum accelerates.
PPG’s reported fourth quarter 2021 earnings per diluted share were $1.12 and adjusted earnings per diluted share were $1.26. Both the reported and adjusted figures included a $0.20 benefit from a lower tax rate related to favorable discrete items that are not expected to recur in the fourth quarter of 2022.
The company will announce third quarter financial results and provide further information on expectations for the fourth quarter on October 19, following the close of the equity markets in the U.S. The company previously forecasted third quarter earnings per diluted share of between $1.60 and $1.85 and adjusted earnings per diluted share of between $1.75 and $2.00.