PPG Industries (PPG) Q2 2026: Revenue Growth, EPS Mixed — Cautiously Optimistic

PPG Industries (NYSE: PPG) reported its second quarter 2026 financial results, showcasing a notable increase in net sales but a slight decline in net income and earnings per share (EPS) compared to the prior year.

Key Findings

• Net Sales: PPG achieved net sales of $4.5 billion, an increase of $300 million or +7% compared to $4.2 billion in Q2 2025.
• Organic Sales Growth: Organic sales rose 4% year over year, with growth in 8 of 9 businesses, primarily driven by the aerospace segment.
• Net Income: Reported net income was $439 million, down $11 million or -2% from $450 million in the same quarter last year.
• Earnings Per Share: EPS was $1.96, a decrease of $0.02 or -1% from $1.98 in Q2 2025. However, adjusted EPS was $2.23, slightly up from $2.22 year over year.
• Cash Flow: Cash from operating activities was approximately $600 million, exceeding the previous year by more than $220 million.
• Share Repurchases: The company repurchased $75 million worth of shares in the quarter, totaling $175 million year to date.
• Guidance: PPG reaffirmed its full-year 2026 adjusted EPS guidance range of $7.70 to $8.10.

Analyst Opinion

This quarter presents a mixed bag for shareholders. On one hand, the 7% increase in net sales is a positive indicator of PPG's ability to grow revenue in a challenging environment. The organic sales growth of 4% across most segments, particularly in aerospace and architectural coatings, demonstrates resilience and effective market positioning. However, the decline in net income and EPS raises concerns about profitability and cost management, particularly in the Performance Coatings segment, which saw an 8% drop in segment income.

The slight increase in adjusted EPS is encouraging, but the overall decline in reported metrics suggests that PPG may be facing headwinds that could impact future performance. The reaffirmation of guidance indicates management's confidence, but investors should remain cautious given the mixed results.

Financial Metrics

• Net Sales: $4,495 million (Q2 2026) vs. $4,195 million (Q2 2025) — +7%
• Net Income: $439 million (Q2 2026) vs. $450 million (Q2 2025) — -2%
• Adjusted Net Income: $500 million (Q2 2026) vs. $504 million (Q2 2025) — -1%
• EPS: $1.96 (Q2 2026) vs. $1.98 (Q2 2025) — -1%
• Adjusted EPS: $2.23 (Q2 2026) vs. $2.22 (Q2 2025) — 0%
• Cash from Operating Activities: $600 million year to date, +220 million YoY
• Share Repurchases: $75 million in Q2 2026, $175 million year to date

Market Movements

The company’s proactive approach to managing costs and adjusting prices globally has resulted in a 2% improvement in selling prices, which is crucial given the rising costs of raw materials and logistics. PPG's ability to cover approximately 90% of cost of goods sold inflation is a positive sign, with expectations to reach 100% by the fourth quarter.

Forward Catalyst

Investors should closely monitor PPG's performance in the upcoming quarter, particularly in the aerospace and architectural coatings segments, which are expected to drive organic sales growth. The anticipated stabilization in automotive refinish coatings and the company's ongoing pricing actions will be critical to watch as they could significantly impact margins and overall profitability. Additionally, any updates on share repurchase activities and further guidance adjustments will be key indicators of management's confidence and strategic direction moving forward.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Note: All amounts are in millions.

$ in millions, except EPS	2Q 2026	2Q 2025	YOY change
Net sales	$4,495	$4,195	+7%
Net income(a)	$439	$450	(2)%
Adjusted net income(a)(b)	$500	$504	(1)%
EPS(a)	$1.96	$1.98	(1)%
Adjusted EPS(a)(b)	$2.23	$2.22	—%

(a) From continuing operations

(b) Reconciliations of reported to adjusted figures are included below

CONDENSED CONSOLIDATED BALANCE SHEETS

Note: All amounts are in millions.

($ in millions)	June 30, 2026	December 31, 2025	June 30, 2025
Cash and cash equivalents	$1,520	$2,101	$1,525
Short-term investments	$74	$56	$64
Receivables, net	$3,912	$3,336	$3,891
Inventories	$2,226	$1,996	$2,224
Other current assets	$529	$408	$450
Total current assets	$8,261	$7,897	$8,163
Short-term debt and current portion of long-term debt	$691	$706	$1,491
Accounts payable and accrued liabilities	$4,307	$3,957	$4,061
Current portion of operating lease liabilities	$135	$138	$141
Restructuring reserves	$96	$99	$147
Total current liabilities	$5,229	$4,900	$5,740
Long-term debt	$6,195	$6,600	$5,900

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