(Reuters) – Paints and coatings maker PPG Industries (NYSE:PPG) missed Wall Street estimates for third-quarter profit on Wednesday, hurt by lower sales at its industrial coatings unit.
The company posted an adjusted profit of $2.13 per share in the July-September quarter, compared with estimates of $2.15, according to data compiled by LSEG.
WHY IT’S IMPORTANT
U.S. new vehicle sales fell during the third quarter due to fewer selling days, weaker consumer spending and higher interest rates, which impacted demand for automotive coatings.
Production at factories in the United States held steady at weaker levels in September, although new orders improved.
CONTEXT
The Pittsburgh, Pennsylvania-based firm is a global supplier of paints, coatings and specialty materials. It is the largest coatings company in the world, followed by Sherwin-Williams (NYSE:SHW).
At PPG’s automotive OEM coatings unit, which sells paints, coatings and adhesives to the auto industry, organic sales declined by double-digit percentage.
However, performance coatings sales during the third-quarter rose compared to last year led by aerospace coatings.
BY THE NUMBERS
Net sales at PPG’s performance coatings segment rose to $2.92 billion in the third quarter, compared with $2.88 billion a year earlier.
Meanwhile, sales at its industrial coatings segment fell 6% to $1.65 billion from the same quarter a year ago.
KEY QUOTE
“Automotive OEM coatings organic sales decreased more than initially forecasted…due to lower U.S. and European industry build rates, which deteriorated notably late in the quarter, partly offset by PPG growth in China and Mexico,” PPG said.