On October 23, PPG reported third quarter 2019 net sales of approximately US$3.8 billion, comparable with the prior year. Net sales in constant currencies were about 2% higher versus the previous year, driven by higher selling prices of 2.6%, and acquisition-related sales, net of divestitures, of more than 2%. Aggregate sales volumes were down nearly 3% versus the prior year. Unfavorable foreign currency translation impacted net sales by approximately 2%, or about US$80 million. Third quarter 2019 reported net income from continuing operations was US$366 million, or US$1.54 per diluted share. Adjusted net income from continuing operations was US$396 million, or US$1.67 per diluted share. Adjusted figures exclude after-tax items of US$30 million for environmental charges and restructuring-related costs. For the third quarter 2019, the reported and adjusted effective tax rates were approximately 23% – higher than the third quarter 2018 reported and adjusted effective tax rates of approximately 18% and 21%, respectively. Detailed reconciliations of the reported to adjusted figures are included below.
“We delivered strong adjusted earnings per share growth of 15% compared to the prior year quarter, as we continue to build momentum and remain focused on operating margin recovery. Strong execution against our cost-savings initiatives and our sixth consecutive quarter with selling price increases of at least 2% aided in our gross profit improvement, as we continue our efforts to offset the significant raw material cost inflation absorbed in the past few years,” said Michael H. McGarry, PPG chairman and chief executive officer.
“Our earnings growth came despite notable weakening in industrial production, which was broad - both geographically and by end-use market – and which more significantly impacted our general industrial and automotive OEM coatings businesses. Consistent with our recent quarterly trends, the aerospace coatings and protective and marine coatings businesses posted strong sales growth.
“We currently expect 2019 full-year adjusted earnings per diluted share to be in the range of US$6.17 to US$6.27, which is comparable to our July guidance and includes fourth quarter year-over-year growth in constant currencies of about 15% at the mid-point,” McGarry added. “This guidance places our full-year 2019 adjusted earnings-per-share growth at the low-to-mid end of our previously communicated 7% to 10% range, excluding currency translation impacts. We continue to expect full-year sales growth of a low-single-digit percentage, excluding currency translation impacts.”
The company reported the impact from unfavorable currency translation on adjusted earnings per diluted share for the full year is expected to be between 18 and 20 cents.
