By Senad Karaahmetovic
Shares of PPG Industries (NYSE:PPG), a global supplier of paints, coatings, and specialty materials, are trading about 5% higher in pre-market Monday after the company hiked its profit forecast for the first quarter.
PPG said it now expects to report adjusted EPS between $1.52 and $1.58, beating the prior guidance for a range of $1.10-1.20. Analysts were looking for EPS of $1.18.
“The pace of our operating margin recovery accelerated during the quarter, driven by higher sales volumes and additional selling price capture,” said Tim Knavish, PPG President and Chief Executive Officer.
“Our stronger sales volume performance compared to our guidance was led by the aerospace and automotive original equipment manufacturer coatings businesses. In addition, we delivered higher year-over-year earnings across most of our business portfolio including Europe.”
PPG added that sales volumes were also better in China “due to fewer pandemic disruptions than initially forecast.”
In addition to the raised EPS guidance for the first quarter, PPG issued an additional business update:
“The company reported that in March 2023, PPG purchased group annuity contracts that transferred pension benefit obligations for certain of the company’s retirees in the U.S. to third-party insurance companies, resulting in an estimated non-cash pension settlement charge of approximately $191 million, or $0.61 per share. The expected first quarter 2023 adjusted EPS noted above excludes the impact of this pension settlement charge.”
PPG shares are up 6.2% year-to-date (YTD) based on Friday’s close.