PPG says it covered about 90 percent of its cost inflation with price in the quarter, and expects to cover all of it a quarter earlier than it promised

Money & World

The Editorial Team · July 29, 2026

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What it changes

If you are trying to read industrial cost pressure off a company that touches almost everything, this is the disclosure worth reading, because PPG has put a percentage on it rather than an adjective. About 90 percent of its cost of goods sold inflation was recovered through price in the quarter, and the remaining ten points are expected by the fourth quarter, a quarter earlier than the company originally committed to. Read plainly, that is a company saying input costs are still climbing across raw materials, energy, logistics and packaging, and that it is passing them through faster than it managed in earlier cycles. If you own the shares, the two numbers to hold together are a 7 percent rise in net sales and a 2 percent fall in net income from continuing operations, and the reconciliation is in the composition: half the revenue growth came from currency translation and acquisitions rather than from selling more product. Volume and price contributed 2 percentage points each. If you work in the automotive aftermarket, the company names a mechanism rather than a mood, saying refinish coatings demand was weaker because the recovery of insurance claims improved more gradually than it anticipated, and that it expects that business to grow at a low to mid-single-digit rate in the second half on the phasing of customer order patterns. Nothing in the release moves the full-year forecast, which stays at $7.70 to $8.10 of adjusted earnings per share.

"Costs have risen for raw materials, energy, logistics and packaging across the coatings value chain." That is PPG, in its second quarter release on Tuesday. The number the company attaches to that sentence is the one worth keeping: it says it covered about 90 percent of its cost of goods sold inflation in the quarter, and expects to cover 100 percent by the fourth quarter, one quarter ahead of its original commitment. It describes that as a faster rate of price realization than it achieved during previous cycles.

Net sales were $4,495m against $4,195m, a rise of 7 percent. Net income from continuing operations was $439m against $450m, a decline of 2 percent. Reported earnings per diluted share were $1.96 against $1.98, and adjusted earnings per diluted share were $2.23 against $2.22. Adjusted net income was $500m against $504m. Sales and profit moved in opposite directions.

The 7 percent breaks into four parts, and only two of them are the business selling more of its own product at its own prices. Sales volumes added 2 percent and selling prices added 2 percent. Foreign currency translation added a further 2 percent and acquisitions added 1 percent. Organic sales, which sets the last two aside, grew 4 percent, with growth in eight of the company's nine businesses.

Global Architectural Coatings grew organic sales 2 percent and improved its EBITDA margin by 100 basis points, which the company attributes to strength in Latin America and modest growth in Europe. Performance Coatings grew organic sales 3 percent, but its margin fell year over year, and PPG gives a specific cause: weaker demand in automotive refinish coatings, as the recovery of insurance claims improved more gradually than anticipated. Industrial Coatings grew sales volumes 5 percent, with double-digit percentage growth in packaging coatings and mid-single-digit growth in both automotive original equipment and industrial coatings. Price in that segment was flat for the quarter, following previous price declines, as the company executed new pricing actions.

Cash from operating activities was approximately $600m year to date, more than $220m higher than a year earlier. At quarter end the company held $1.6bn in cash and short-term investments, and net debt stood at $5.3bn, a decrease of $415m from the second quarter of 2025. Share repurchases were $75m in the quarter and $175m year to date. During the quarter PPG issued CHF320m of long-term bonds due in 2030 and 2034, at 1.22 percent and 1.66 percent.

Full-year adjusted earnings per share guidance is reaffirmed at $7.70 to $8.10. For the third quarter the company expects aggregate organic sales growth in the low single-digit to mid-single-digit percentage range, led by aerospace, Latin American architectural coatings and packaging coatings. Tim Knavish, the chairman and chief executive, said the quarter was the company's sixth consecutive one of organic sales growth and that it outpaced the industry by 300 basis points.

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