tapebrief
PPG · Q4 2025

PPG · Q1 2026 Earnings

Cautious

PPG Industries

Reported April 28, 2026

30-second summary

PPG delivered Q1 revenue of $3.93B (+7% YoY, +1% organic with +6% FX and +1% price) and non-GAAP EPS of $1.83 (+6% YoY) — yet held the FY2026 EPS guide flat at $7.70–$8.10 and guided Q2 to "flat to low single-digit" organic and EPS growth. The reaffirmation absorbs an Iran-war-driven mid-single-digit COGS inflation cost, which management plans to fully offset via up-to-20% announced price increases; the cost-and-price cycle, refinish recovery, and aerospace capacity ramp are now the three swing factors carrying the back half. The Q2 "flat to LSD organic" guide is in line with Q1 organic of +1%, not a step-down — the reported +7% is mostly FX.

Headline numbers

EPS

Q1 FY2026

$1.83

+3.4% vs est.

Revenue

Q1 FY2026

$3.93B

+7.0% YoY

+2.1% vs est.

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$3.93B+7.0%$3.91B+0.4%
EPS$1.83—$1.51+21.2%

Guidance

PPG reaffirmed full-year FY2026 adjusted EPS guidance of $7.70–$8.10 while beating Q1 revenue and EPS expectations; Q2 FY2026 guided for flat to low single-digit organic sales and EPS growth.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
Adjusted EPSQ1 FY2026flat to low single-digit percentage growth1.83+3.4% above consensus estimateBeat
RevenueQ1 FY2026flat to low single-digit percentage growth (organic)3.93+2.1% above consensus estimate; +7% YoYBeat

New guidance

MetricPeriodGuideYoY
Organic sales growthQ2 FY2026flat to low single-digit percentage—
Adjusted EPS growthQ2 FY2026flat to low single-digit percentage—

Reaffirmed unchanged this quarter: Adjusted EPS (7.70 to 8.10)

Segment KPIs

Q1 FY2026
SegmentQ1 FY2026YoY
Global Architectural Coatings$0.965B+13.0%
Performance Coatings$1.334B+5.0%
Industrial Coatings$1.631B+4.0%

Other KPIs

Q1 FY2026
SegmentQ1 FY2026
Organic sales growth1%
Segment EBITDA margin19.2%
Global Architectural Coatings EBITDA margin19.1%
Performance Coatings EBITDA margin24.4%
Industrial Coatings EBITDA margin15.0%
Aerospace order backlog$315 million
Share repurchases$100 million
Cash from operating activities$33 million

Management tone

Q2 FY2025 show-me → Q3 FY2025 guide cut → Q4 FY2025 cautious reaffirmation → Q1 FY2026 reaffirmation with active price offset.

The pricing posture has shifted from incremental to primary. Three quarters ago pricing was a benign offset to flat raws; one quarter ago it was a reaffirmed assumption. This quarter management is announcing up-to-20% price increases as the principal mechanism to defend the EPS range against Iran-driven COGS inflation: "we expect to deliver price-cost realization much more rapidly than we did in previous inflation cycles." The acknowledgment that PPG needs faster-than-historical realization is itself a flag — the previous cycles took 12 to 18 months to neutralize at run-rate, and the FY guide requires it to land in months. That is a tighter execution window than prior cycles delivered.

The geopolitical framing is new in substance, not just degree. Last quarter management spoke of Europe and global industrial as "challenged"; this quarter management quantified Iran-war impacts as mid-single-digit COGS inflation and explicitly leaned on PPG's "broad and global supply chain footprint" as the mitigation: "to date we have had limited impact from supply shortages." The "to date" qualifier is doing the work — management is preempting supply anxiety while acknowledging structural petrochem facility damage may extend the recovery timeline beyond their control.

Aerospace elevation continues quarter over quarter. This quarter management volunteered specific capital sequencing — ~$150M of de-bottlenecking already deployed over the past year, a new ~$380M facility on track for ~2028 output step-change, additional engineering work for future investments. "I would like to again emphasize the important and sizable role that our aerospace business plays as a key growth engine for our company." The repetition is deliberate — aerospace is being built as the structural offset to refinish and industrial cyclicality.

Refinish reframing moved to "industry demand in automotive refinish has been recovering faster than we initially expected." That is the first unambiguously positive sequential refinish data point in four quarters. But management still pushes auto refinish PPG-specific improvement to H2 FY2026 on customer order phasing — so the industry data improved while PPG's own benefit timing is unchanged.

The serial-deferral pattern remains the silent anchor. The Q1 beat plus visible improvement in refinish, aerospace, and architectural margin would normally support a guide raise. Management didn't raise — they reaffirmed. That is either appropriate caution against the Iran-driven cost shock or it is preserving cushion against another H2 disappointment. Either reading implies management is not yet confident the trajectory has turned.

Recurring themes management leaned on this quarter:

Pricing realization acceleration outpacing inflationAerospace as core growth driver with multi-year demand visibilityGeopolitical cost headwinds partially offset by supply chain resilienceMarket share gains in key segments despite macro softnessStructural cost reduction in architectural segmentSequential margin improvement expected Q2 2026

Risks management surfaced:

Iran war-driven raw material, energy, logistics, and packaging cost inflationPersistent softness in European architectural coatings marketChina automotive production weakness in first half 2026Automotive refinish volume declines expected through Q2 2026Global industrial end-use market demand remaining below prior year

Q&A highlights

Gansham Panjabi · Baird

What specific changes have been made to support faster price-cost recovery compared to prior cycles, and will volumes hold given near 20% price increases implemented?

Management highlighted improved organic growth momentum from the past 3 years as a differentiator. Prior cycles took 18 months (2017-18) and 12 months (2021) to reach run-rate neutrality; current cycle targeting months. Confidence in balancing pricing and volume through refined pricing muscle and positive organic growth trajectory.

2017-18 cycle took ~18 months to run-rate neutrality2021 cycle took ~12 months to run-rate neutralityCurrent cycle targeting months to reach neutralityFive consecutive quarters of organic growth demonstrated

Michael Sisson · Wells Fargo

How do volumes shape up at midpoint for H2; what are Iran conflict effects by segment and volume growth embedded in guidance?

Management expects positive H2 volumes driven by: aerospace beating Q1 expectations and sold out; refinish recovery accelerating earlier than expected with positive collision claims and distributor data; industrial segment share wins; Mexico recovery; packaging double-digit growth; no order book impact from Iran conflict despite feedstock pricing changes.

Aerospace output exceeding expectations and essentially sold outRefinish recovery accelerating ahead of expectationsU.S. collision claims rates and distributor fulfillment improvingMexico retail performing well; project improvements each quarter

Chris Parkinson · Wolf Research

What are the puts and takes on H2 margins; what needs to happen or what is expected for improvement given pricing actions and potential positive mix in PC?

Management confident in positive H2 net EBITDA margin improvement driven by: aerospace growth, refinish recovery, Mexico growth, favorable mix from industrial segment share wins already locked in, pricing actions, offset by higher RAS/energy/logistics costs. Additional cost actions include European plant closures in H2 2026.

Net EBITDA margin expected to improve in H2Aerospace: good margin contributor with continued growthRefinish recovery: big impact on net marginMexico: continuing to grow, good margin contributor

David Begleiter · Deutsche Bank

How will announced price increases be realized; what is the sustainability of these increases if oil and input costs come down?

Announced up to 20% price increases; actual realization will be spread based on customer size and product mix. Need to achieve low single-digit realization to offset mid-single-digit COGS inflation. Ready to flex pricing mid-single digits if situation worsens. Pricing lags on both upside and downside; multiple price increases typical in prior cycles. Structural petrochem facility damage may extend recovery timeline.

Up to 20% price increases announcedNeed low single-digit realization to offset mid-single-digit COGS inflationFlexibility to move to mid-single-digit pricing if conditions worsenLag in pricing going up and coming down

Jeff Zakakis · JP Morgan

What was Q1 currency benefit; will PPG be ahead or behind raw material cost inflation in auto OEM; should aerospace volume growth rate increase as capacity constraints ease?

Currency benefit was less than $0.10 positive YoY in Q1; remaining three quarters less than half that with most in Q2. On auto OEM: getting pricing despite toughness of industry; acute inflation driver helps convince customers; some index contracts will move with lag per guidance normalizing by Q1 2027. Aerospace: continuous improvements through $150M de-bottlenecking investments over past year; new $380M plant announced for step-change in late 2028; additional engineering work ongoing for future investments.

Q1 currency benefit: <$0.10 positive YoYH2 currency benefit: <$0.05, mostly in Q2~$150M invested in aerospace de-bottlenecking over past year$380M new aerospace plant announced for ~2028 output

Answers to last quarter's watch list

FY2026 guide cut risk in Q1 FY2026 — Guide reaffirmed at $7.70–$8.10. Q1 EPS grew 6% YoY to $1.83 and Q2 organic/EPS guidance of flat-to-low-single-digit is consistent with management's prior H1-soft framing. The Q1 beat is being banked rather than flowed through, but the guide held — the cut risk did not materialize. Status: Resolved positively
December refinish trajectory holding into Q1 FY2026 — Management said industry demand is "recovering faster than we initially expected," citing U.S. claims down only 1% YoY in February and March and three of the last four months with low single-digit declines. The December -2% inflection extended and improved, not retreated. PPG-specific refinish benefit still phased to H2 on customer order patterns. Status: Resolved positively
Segment EBITDA margin floor — Q1 FY2026 total segment EBITDA margin held at 19.2%, down only 20bps from Q1 FY2025's 19.4% despite the inflation backdrop. Performance Coatings margin held at 24.4% and Global Architectural improved 230bps YoY to 19.1%. Industrial Coatings remains the soft spot at -180bps YoY on China auto mix and index-contract pricing. Status: Resolved positively at total level; Industrial bears watching
Aerospace capacity build timing — ~$380M facility on track for ~2028 output step-change; ~$150M of de-bottlenecking deployed over the past year, with additional engineering work for future investments underway. Per the transcript prepared remarks, backlog stands at about $350M (the press release cites about $315M for the segment) and aerospace is "essentially sold out." Timeline neither accelerated nor extended; demand commentary suggests the existing plan is at the limit of capacity. Status: Continue monitoring — also reconcile backlog disclosure
Industrial share-win revenue realization — Management confirmed industrial segment share gains are "already locked in" for FY2026 contribution and pointed to packaging double-digit organic and PMC strength in Q1. Industrial Coatings +4% YoY in Q1 (1% volume growth, outpacing industry) supports H1 realization rather than back-loading. Status: Resolved positively

What to watch into next quarter

Whether the Q2 "flat to low single-digit" organic guide holds — Coming in below the bottom of the band would imply the Iran cost shock is bleeding into demand, not just margin.

Price realization pace through Q2 — management needs low single-digit price realization to offset mid-single-digit COGS inflation, with run-rate neutrality targeted in "months" versus 12–18 months historically. Q2 print needs to show pricing flowing into Architectural and Performance Coatings (the announced phasing) without volume erosion; index-based Industrial contracts will lag into Q1 2027.

Refinish PPG-specific volumes — the industry data has clearly turned (claims -1% YoY in Feb/Mar). Management still phases PPG's own refinish improvement to H2 on customer order patterns. Watch for whether Q2 shows PPG refinish volumes improving alongside the industry data or remaining a drag despite it.

Aerospace backlog evolution and disclosure reconciliation — press release cites ~$315M and transcript prepared remarks cite ~$350M; the trajectory of that figure (whichever is the consistent disclosure going forward) is the cleanest read on whether the capacity-constrained narrative is intensifying or stabilizing ahead of the 2028 facility ramp.

FY2026 EPS guide revision posture at Q2 — management banked the Q1 beat and absorbed Iran cost inflation into a reaffirmation. A Q2 raise would validate the H2 acceleration; a second reaffirmation despite another beat would imply management is bracing for an H2 cost step-up they have not yet quantified.

Sources

  1. PPG Q1 FY2026 Earnings Release — https://www.sec.gov/Archives/edgar/data/79879/000007987926000167/exhibit99-1q2026earningsre.htm
  2. PPG Q4 FY2025 Earnings Release — https://www.sec.gov/Archives/edgar/data/79879/000007987926000025/exhibit99-4q2025earningsre.htm
  3. PPG Q1 FY2026 management commentary and Q&A

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