Third Quarter 2026
Filed Oct 27, 2026PPG reports record third quarter 2026 EPS and raises midpoint of full-year EPS guidance
Net sales increased 7%, adjusted EPS increased 6%, and full-year adjusted EPS guidance was updated to a higher midpoint. Performance Coatings and Global Architectural Coatings expanded EBITDA margins, while Industrial Coatings margin contracted due to cost of goods sold inflation.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, Third Quarter 2026GAAP | $4.35B | – | +7% |
| Net sales, Nine Months Ended September 30, 2026GAAP | $12.78B | – | – |
| Reported net income from continuing operations, Third Quarter 2026GAAP | $473M | – | +7% |
| Adjusted net income from continuing operations, Third Quarter 2026non-GAAP | $502M | – | +4% |
| Income from continuing operations, Three Months Ended September 30, 2026GAAP | $478M | – | – |
| Net income attributable to controlling and noncontrolling interests, Three Months Ended September 30, 2026GAAP | $456M | – | – |
| Net income attributable to PPG, Three Months Ended September 30, 2026GAAP | $451M | – | – |
| Income from continuing operations, Nine Months Ended September 30, 2026GAAP | $1.30B | – | – |
| Net income attributable to controlling and noncontrolling interests, Nine Months Ended September 30, 2026GAAP | $1.28B | – | – |
| Net income attributable to PPG, Nine Months Ended September 30, 2026GAAP | $1.27B | – | – |
| Earnings per common share from continuing operations, assuming dilution, Third Quarter 2026GAAP | $2.12 | – | +8% |
| Adjusted earnings per diluted share from continuing operations, Third Quarter 2026non-GAAP | $2.25 | – | +6% |
| Earnings per common share attributable to PPG, assuming dilution, Three Months Ended September 30, 2026GAAP | $2.02 | – | – |
| Earnings per common share from continuing operations, assuming dilution, Nine Months Ended September 30, 2026GAAP | $5.78 | – | – |
| Earnings per common share attributable to PPG, assuming dilution, Nine Months Ended September 30, 2026GAAP | $5.67 | – | – |
| Cost of sales, exclusive of depreciation and amortization, Three Months Ended September 30, 2026GAAP | $2.59B | – | – |
| Selling, general and administrative, Three Months Ended September 30, 2026GAAP | $876M | – | – |
| Research and development, net, Three Months Ended September 30, 2026GAAP | $106M | – | – |
| Income before income taxes, Third Quarter 2026GAAP | $631M | – | – |
| Income tax expense, Third Quarter 2026GAAP | $153M | – | – |
| Effective tax rate, continuing operations, Third Quarter 2026GAAP | 24.2% | – | – |
| Adjusted effective tax rate, continuing operations, Third Quarter 2026non-GAAP | 24.2% | – | – |
| Interest expense, net of interest income, Third Quarter 2026GAAP | $22M | – | – |
| EBIT, Third Quarter 2026non-GAAP | $653M | – | – |
| EBITDA, Third Quarter 2026non-GAAP | $781M | – | – |
| Adjusted EBITDA, Third Quarter 2026non-GAAP | $793M | – | – |
| Net income margin, Third Quarter 2026GAAP | 10.9% | – | – |
| EBIT margin, Third Quarter 2026non-GAAP | 15.0% | – | – |
| Adjusted EBITDA margin, Third Quarter 2026non-GAAP | 18.2% | – | – |
| Cash from operating activities, Nine Months Ended September 30, 2026GAAP | $1.16B | – | – |
| Cash from operating activities - continuing operations, Nine Months Ended September 30, 2026GAAP | $1.16B | – | – |
| Capital expenditures, Nine Months Ended September 30, 2026GAAP | $464M | – | – |
| Operating working capital, September 30, 2026other | $3.32B | – | – |
| Operating working capital as a percent of quarter sales, annualized, September 30, 2026other | 19.1% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Global Architectural Coatings SegmentOrganic sales growth of 2% reflected higher selling prices partially offset by lower sales volumes. Latin America and Asia Pacific benefited from higher selling prices and volume growth in Latin America, while EMEA had higher selling prices partially offset by lower sales volumes. | $1.05B | – | +4% |
| Performance Coatings SegmentOrganic sales increased 8% with higher sales volumes and selling prices, while acquisitions added 2%. Aerospace, protective and marine coatings, and automotive refinish coatings led growth. | $1.55B | – | +10% |
| Industrial Coatings SegmentOrganic sales increased 4%, reflecting share gains, higher sales volumes and selling prices. Packaging coatings organic sales increased by a double-digit percentage and industrial coatings organic sales improved by a high single-digit percentage. | $1.74B | – | +5% |
Fourth quarter 2026 and full-year 2026 outlook
- RevenueFourth quarter organic sales growth of a low single-digit percentage
- NoteFourth quarter company adjusted EBITDA margin in the range of flat to an increase of 100 basis points year over year
- NoteFull-year adjusted earnings per share guidance range of $7.90 to $8.10
- NoteGlobal Architectural Coatings: fourth quarter organic sales in the range of flat to growth of a low single-digit percentage year over year and EBITDA margin expansion
- NotePerformance Coatings: fourth quarter organic sales growth in the range of a low single-digit percentage to a mid-single-digit percentage year over year and EBITDA margin expansion driven by pricing actions and automotive refinish stabilization
- NoteIndustrial Coatings: fourth quarter organic sales in the range of up or down a low single-digit percentage year over year and EBITDA margin compression due to the timing of index-based pricing
Capital returns
- Share repurchases totaled about $150 million in the quarter and $320 million year to date.
- Purchase of treasury stock was $322 million for the Nine Months Ended September 30, 2026, compared with $687 million for the Nine Months Ended September 30, 2025.
- Dividends paid on PPG common stock were $482 million for the Nine Months Ended September 30, 2026, compared with $468 million for the Nine Months Ended September 30, 2025.
What drove it
- Third-quarter net sales increased 7% due to higher selling prices of 3%, higher sales volumes of 2%, positive foreign currency translation of 1% and acquisitions of 1%.
- Organic sales increased 5% year over year, marking the seventh consecutive quarter of growth.
- Commercial actions fully offset the impact of cost of goods sold inflation during the third quarter.
- Global Architectural Coatings segment EBITDA was $253 million and segment EBITDA margin was 24.0%, compared with $213 million and 21.0%.
- Performance Coatings segment EBITDA was $372 million and segment EBITDA margin was 23.9%, compared with $307 million and 21.7%.
- Industrial Coatings segment EBITDA was $251 million and segment EBITDA margin was 14.4%, compared with $281 million and 17.0%.
Concerns
- Industrial Coatings segment EBITDA decreased 11% and segment EBITDA margin declined 260 basis points due to inflation on cost of goods sold partially offset by higher selling prices and sales volumes.
- Global Architectural Coatings sales volumes declined (2)% in the quarter.
- Automotive OEM coatings organic sales decreased by a low single-digit percentage.
- Industrial Coatings expects fourth-quarter EBITDA margin compression due to the timing of index-based pricing.
- The effective tax rate, continuing operations, was 24.2%, compared with 21.2% in the third quarter 2025.
What to watch
- Fourth-quarter organic sales growth is expected to be led by aerospace, architectural coatings in Latin America, and packaging coatings.
- Whether pricing actions and productivity programs support the guided fourth-quarter company adjusted EBITDA margin range of flat to an increase of 100 basis points year over year.
- Realization of lagging index pricing and the expected timing-related margin compression in Industrial Coatings.
- Aerospace order backlog, which remained near $300 million.
- Automotive refinish stabilization, identified as a driver of expected Performance Coatings margin expansion.
Balance sheet and cash flow
- Cash and cash equivalents were $1,593 million at September 30, 2026, compared with $2,163 million at December 31, 2025 and $1,832 million at September 30, 2025.
- Short-term investments were $49 million at September 30, 2026, compared with $56 million at December 31, 2025 and $76 million at September 30, 2025.
- Cash and short-term investments totaled $1.6 billion at quarter end.
- Short-term debt and current portion of long-term debt was $686 million at September 30, 2026, compared with $706 million at December 31, 2025 and $1,410 million at September 30, 2025.
- Long-term debt was $6,155 million at September 30, 2026, compared with $6,602 million at December 31, 2025 and $5,904 million at September 30, 2025.
- Net debt was $5.2 billion, a decrease of approximately $200 million from the third quarter 2025.
- Receivables, net were $3,857 million at September 30, 2026; inventories were $2,236 million.
- Cash from operating activities was $1,158 million for the Nine Months Ended September 30, 2026, including $1,160 million from continuing operations and ($2) million from discontinued operations.
Analysis
PPG reported third-quarter net sales of $4,353 million, up 7%, with higher selling prices of 3%, higher sales volumes of 2%, positive foreign currency translation of 1% and acquisitions of 1%. Organic sales increased 5%. Reported diluted EPS from continuing operations was $2.12, while adjusted EPS was $2.25, up 6%. Adjusted EBITDA was $793 million and adjusted EBITDA margin was 18.2%, unchanged from the prior-year quarter.
Performance Coatings was the principal earnings contributor. The segment delivered $1,554 million of sales, 8% organic sales growth, segment EBITDA of $372 million and a 23.9% EBITDA margin, up from 21.7%. Aerospace posted double-digit percentage organic sales growth and backlog remained near $300 million. Global Architectural Coatings generated $1,055 million of sales, with 2% organic sales growth, and expanded EBITDA margin to 24.0% from 21.0% through price realization and productivity actions.
Industrial Coatings was the principal offset. Segment sales rose 5%, including 4% organic sales growth, but EBITDA declined to $251 million from $281 million and margin fell to 14.4% from 17.0%. The company attributed the margin decline to inflation on cost of goods sold, partly offset by price and volume. Pricing increased 2% in the segment as PPG began to realize lagging index pricing benefits, but the company expects fourth-quarter margin compression from index-pricing timing.
Cash from operating activities was $1,158 million for the first nine months, compared with $1,054 million, and capital expenditures were $464 million. PPG repurchased about $150 million of shares in the quarter and $320 million year to date, while dividends paid for the first nine months were $482 million. Quarter-end cash and short-term investments totaled $1.6 billion, and net debt was $5.2 billion.
The outlook calls for fourth-quarter organic sales growth of a low single-digit percentage and adjusted EBITDA margin ranging from flat to an increase of 100 basis points year over year. PPG raised the midpoint and narrowed full-year adjusted EPS guidance to $7.90 to $8.10. Management cited growth momentum, realized pricing benefits and productivity execution, with aerospace, Latin American architectural coatings and packaging coatings expected to lead fourth-quarter organic growth.
Management, verbatim
I am extremely encouraged by our performance as we delivered record third quarter EPS, an increase of +6% year over year.
Tim Knavish, PPG chairman and chief executive officer
Our teams around the world executed with strong discipline, driving a solid 5% increase in organic sales, which marks our seventh consecutive quarter of growth.
Tim Knavish, PPG chairman and chief executive officer
We are raising the midpoint of our full-year adjusted earnings per share outlook and narrowing the guidance range to $7.90 to $8.10.
Tim Knavish, PPG chairman and chief executive officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparison of actual results with prior guidance is unavailable.
- Gross profit and gross margin were not reported.
- GAAP operating income was not reported.
- Free cash flow was not reported.
- Quarterly cash from operating activities and quarterly capital expenditures were not reported.
- Prior-quarter comparisons for income statement and segment metrics were not reported.
- Full-year 2026 revenue, gross margin, operating expenses and tax-rate guidance were not reported.
- A reconciliation of fourth-quarter 2026 or full-year 2026 expected adjusted EPS or adjusted EBITDA to the most directly comparable GAAP financial measure was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.