PPG INDUSTRIES INC (PPG) Q3 2025 Earnings Summary

Executive Summary

PPG delivered modest top-line growth with net sales of $4.08B (+1% YoY) and record Q3 adjusted EPS of $2.13 (+5% YoY) as price/volume gains offset divestiture headwinds; segment EBITDA margin was 19.6% .
Results beat S&P Global consensus on revenue ($4.08B vs $4.03B*) and adjusted EPS ($2.13 vs $2.08*), but EBITDA was below SPGI consensus on their basis ($716M* actual vs $744M*), noting company-reported total segment EBITDA was $801M (different basis) . Values with asterisks from S&P Global.
Full-year adjusted EPS guidance was lowered to $7.60–$7.70 (from $7.75–$8.05), with management citing weaker U.S. collision claims and distributor destocking in automotive refinish; implied Q4 guide is ~$1.53–$1.63 vs Q4 Street EPS of ~$1.61* . Values with asterisks from S&P Global.
Likely stock reaction catalysts: guidance cut tied to refinish destocking; structural growth in aerospace (record sales, >$0.5B multi‑year capex), packaging and auto OEM share gains; and steady capital returns ($150M buybacks, $0.71 dividend) .

What Went Well and What Went Wrong

What Went Well
- Aerospace and protective & marine delivered double-digit organic growth; aerospace posted record sales and backlog rose to ~$310M; management outlined >$0.5B multi-year investments to capture growth .
- Industrial Coatings: volumes +4% with above-market auto OEM growth (+8% net sales), packaging coatings double-digit growth; segment EBITDA +12% and margin +180 bps YoY to 17.0% .
- Cost discipline and portfolio actions supported record Q3 adjusted EPS ($2.13) with 2% organic growth and third straight quarter of volume growth; “self-help” restructuring savings ~ $75M in 2025 reiterated .
What Went Wrong
- Automotive refinish organic sales fell double-digits as U.S. collision claims remained depressed and distributors front-loaded purchases in 1H, producing destocking; this drove Performance Coatings margin down 280 bps YoY .
- Architectural EMEA volumes remained soft; segment volumes -2% with mix and divestiture headwinds muting improvement despite price gains and FX tailwinds .
- Guidance lowered: full-year adjusted EPS cut to $7.60–$7.70 on weaker refinish demand and inventory normalization; Q4 implied EPS below prior expectations .

Financial Results

Consolidated P&L and Margins (chronological: YoY comp, prior quarter, current)

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Millions)	$4,032	$4,195	$4,082
Reported EPS (Diluted, Cont. Ops)	$1.90	$1.98	$1.96
Adjusted EPS (Diluted, Cont. Ops)	$2.03	$2.22	$2.13
Total Segment EBITDA ($USD Millions)	$798	$852	$801
Total Segment EBITDA Margin %	19.8%	20.3%	19.6%

Q3 2025 vs S&P Global Consensus (SPGI values marked with asterisks)

Metric	Consensus (Q3 2025)	Actual (Q3 2025)	Surprise
Revenue ($USD Millions)	$4,034.6*	$4,082	+$47.4 (Beat)
Adjusted/Primary EPS ($)	$2.083*	$2.13	+$0.05 (Beat)
EBITDA ($USD Millions)	$743.7*	$716.0*	-$27.7 (Miss)

Values retrieved from S&P Global. Company-reported total segment EBITDA was $801M (different basis) .

Segment Breakdown

Segment	Net Sales Q3’24	Net Sales Q3’25	YoY	Segment EBITDA % Q3’24	Segment EBITDA % Q3’25
Global Architectural Coatings	$1,004	$1,012	+1%	20.8%	21.0%
Performance Coatings	$1,373	$1,414	+3%	24.5%	21.7%
Industrial Coatings	$1,655	$1,656	~0%	15.2%	17.0%

KPIs and Other Financials

KPI	Q3 2025	Prior/Notes
Organic Sales Growth	+2% YoY (3rd straight quarter of volume growth)	Q2 organic +2%
Aerospace Backlog	~$310M	~$300M in Q2
Net Interest Expense (Quarter)	$23M	$18M in Q2
Tax Rate (Reported/Adjusted)	~21% / ~22%	Q2 adj. ~23.5%
Share Repurchases	~$150M in Q3; ~$690M YTD	~$540M YTD by Q2
Cash & Short-term Investments	~$1.9B	$1.6B in Q2
Net Debt	~$5.4B	$5.7B in Q2

Non-GAAP adjustments: Q3 adjusted EPS excludes items including ~$0.11 acquisition amortization and ~$0.03 restructuring; reconciliation provided in the press release and 8-K .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS (Diluted)	FY 2025	$7.75–$8.05 (Q1/Q2 reaffirmed)	$7.60–$7.70	Lowered
Q4 2025 Implied Adjusted EPS	Q4 2025	N/A	~$1.53–$1.63 (calc: FY guide less YTD $6.07)	Below/At Street (~$1.615*)

Values with asterisks from S&P Global.

Dividend/Capital Returns: Declared $0.71 quarterly dividend (Dec 12 pay date), marking 54 consecutive years of increases; continued buybacks (~$150M in Q3) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025 / Q2 2025)	Current Period (Q3 2025)	Trend
Automotive Refinish demand	Q1: Low single-digit growth vs industry claims decline; share gains and subscription revenue . Q2: Decline expected in 2H due to order patterns/industry activity .	Double-digit decline; U.S. insurance-driven claims softness; distributor destocking; normalization expected by mid-2026 .	Weak near term; recovery expected over next 3–4 quarters
Aerospace growth	Q1: Record sales, double-digit growth, ~$300M backlog . Q2: Record sales/earnings; continued investments .	Record sales; backlog ~$310M; >$0.5B multi‑year investments with strong IRRs .	Structurally positive; scaling capex/OpEx
Industrial share gains	Q1: Early share gains; Industrial volumes flat . Q2: Low-single-digit volume growth expected in H2; auto OEM/packaging outperformance .	Volumes +4%; auto OEM +8% net sales, ~300 bps above industry; packaging double-digit growth .	Improving execution; above-market growth
Mexico architectural	Q1: Retail solid; project-related paused . Q2: Project-related to improve in H2 .	Retail strong; gradual improvement expected in project demand in Q4 .	Sequential recovery
Europe architectural	Q1: Stabilizing, still soft . Q2: EMEA weak .	EMEA volumes modestly lower; management seeing early stabilization; cost actions ongoing .	Stabilizing off lows
Raw materials / tariffs	Q1/Q2: Managing; LSD inflation implied in H2 commentary .	LSD raw inflation; epoxy/tariffs manageable; supplier base consolidation to aid costs .	Benign to modest inflation

Management Commentary

Strategic focus: “We are benefiting from our sharpened portfolio of technology-differentiated products and services… The focus we have put on operational excellence, investing in innovation, and driving share gains… supports our strategy to deliver sustainable top-line and bottom-line growth.” .
Refinish pressure: “We were expecting industry normalization earlier… distributors… are focused on running their inventories down for year end… more normalization to be seen in the middle of 2026.” .
Aerospace investments: “We announced an investment in a new manufacturing facility which will be commissioned in 2027… investments represent more than $0.5 billion… deliver very strong financial returns.” .
Mexico/EMEA: “Retail sales were solid in [Mexico]… project-related sales remained subdued… expect incremental improvements… in the fourth quarter.” . “EMEA… soft demand… taking aggressive structural cost actions… signs of stabilization.” .
Capital allocation: “Approximately $150 million in share repurchases and $160 million in dividends during the third quarter… deployed $1.2 billion toward share repurchases and dividends year to date.” .

Q&A Highlights

Automotive refinish: Management attributes weakness to depressed U.S. collision claims due to insurance dynamics and distributor destocking; expects industry “normalization” mid‑2026; PPG continues share gains via productivity/digital tools (LINQ, MoonWalk; >3,000 installs) .
Guidance cut: Lowered Q4 on refinish “double whammy” (claims + destocking); latest claims data still mid-single-digit negative YoY .
Aerospace/PMC margins and spend: Performance Coatings margins pressured by mix (refinish down) and higher growth-related OpEx/CapEx in aerospace and PMC; investments expected to pay off in 2026–2027 .
Industrial outgrowth: Auto OEM outgrew industry across all regions; packaging share gains sustained .
Raw materials and tariffs: LSD raw inflation outlook; epoxy already incorporated; supplier consolidation to improve leverage .
Working capital/Capex: Capex peaking near term due to aerospace; glide path back to ~3% of sales by 2027; operating cash flow expected to grow faster than EBITDA as inventory normalizes .

Estimates Context

Q3 2025 vs SPGI consensus: Revenue beat by ~$47M ($4.082B vs $4.035B*), adjusted/primary EPS beat by ~$0.05 ($2.13 vs $2.083*). SPGI EBITDA came below consensus on their basis ($716M* vs $744M*), noting company-reported total segment EBITDA was $801M . Values with asterisks from S&P Global.
Q4 2025 Street (SPGI): EPS ~$1.615*, revenue ~$3.77B*; company’s FY guide implies Q4 EPS ~$1.53–$1.63, reflecting refinish headwinds and inventory normalization . Values with asterisks from S&P Global.
Where estimates may adjust: Expect refinish volume/destocking to prompt near-term EPS revisions toward low end of guidance; aerospace/industrial outgrowth and cost actions support 2026 margin recovery as refinish normalizes mid‑2026 .

SPGI disclaimer: Values marked with asterisks retrieved from S&P Global.

Key Takeaways for Investors

Near-term: Q4 skew weaker as refinish demand and distributor inventory drawdowns persist; expect muted Performance Coatings margins near term despite aerospace strength .
Medium-term: Aerospace and protective & marine provide durable growth/mix uplift; >$0.5B multi-year investments should expand earnings power into 2026–2027 .
Industrial engine: Auto OEM and packaging share gains are translating into volume leverage and margin expansion; track continuation into 2026 .
Portfolio and costs: Restructuring/self-help savings (~$75M in 2025) and portfolio pruning support structurally higher margin profile vs pre-2025; watch execution in EMEA architectural .
Capital returns: Ongoing buybacks and sustained dividend growth (54 straight years) provide downside support while growth investments are funded from strong balance sheet/cash generation .
Setup: Estimate revisions likely gravitate to low end of FY guide; positive inflection as refinish normalizes and aerospace capacity comes online could be a 2026–2027 re‑rating driver .

Appendix: Other Relevant Q3 2025 Press Releases

Dividend: Board declared $0.71/share quarterly dividend; payable Dec 12; 54 consecutive years of increases .
Digital sustainability partnership: Solera-PPG integration to enable CO₂ per‑repair tracking and deepen LINQ/MOONWALK ecosystem penetration in refinish—supports productivity-led share gains amid softer volumes .

Citations

Q3 2025 press release and 8-K:
Q3 2025 earnings call transcript:
Prior quarters for trend/guidance: Q2 2025 8-K ; Q1 2025 8-K
Dividend press release:
Solera partnership press release: