In this week's Tuesday Ticker, Paint and coatings suppliers report mixed second-quarter results, with Axalta and Sherwin-Williams recording higher sales while lower automotive refinish demand weighed on PPG’s margins.
Refinish Lead
Sherwin-Williams is reporting second-quarter sales of US$6.79 billion, up 7.5% from a year earlier. Performance Coatings Group sales rose 6.3% to US$1.91 billion, with automotive refinish and general industrial segments leading growth.
“We also implemented pricing actions to offset raw material inflation that pressured our gross margin in the quarter,” said Heidi Petz, chair, president and CEO. An 8% price increase in the Paint Stores Group will take effect Sept. 1.
Sherwin-Williams shares rose 8.3% on July 28 following the release.
Record Refinish
Axalta is reporting second-quarter sales of US$1.35 billion, up 3% from a year earlier.
Refinish sales increased 6% to US$545 million, while adjusted earnings before interest, taxes, depreciation and amortization rose 5% to a quarterly record of US$305 million.
“Our team continues to drive operational excellence that underpins our consistent financial performance, and we carry solid momentum into the second half of the year,” said Chris Villavarayan, CEO and president.
Axalta shares were up 2.1% in premarket trading shortly after the results were released.
Claims Drag
PPG is reporting second-quarter sales of US$4.5 billion, up 7% from a year earlier. Performance Coatings sales rose 7% to US$1.62 billion and organic sales increased 3%, but lower automotive refinish volumes helped push segment earnings down 8% and its earnings margin from 23.5% to 20.3%.
“Margin declined year over year, driven by weaker automotive refinish coatings demand, as the recovery of insurance claims improved more gradually than anticipated,” said Tim Knavish, chairman and CEO.
PPG shares fell 6% to US$111.83 on July 29 following the after-market release.
