PPG Industries on Tuesday said it anticipates continued softness in demand across Europe and in industrial end-use markets in 2026, after falling short of Wall Street profit forecasts for the fourth quarter. The company cited higher feedstock and energy costs and an uncertain macroeconomic backdrop as factors that have dampened demand for its products, which serve customers in autos, building and construction and other industries.
For the quarter ended December 31, PPG reported adjusted earnings of $1.51 per share, compared with the analysts' consensus of $1.58 per share, based on data compiled by LSEG. Net sales for the period rose to $3.91 billion from $3.73 billion a year earlier.
Within PPG's segment reporting, sales in the performance coatings division climbed to $1.32 billion in the October-December quarter from $1.26 billion a year earlier. Sales in the industrial coatings segment increased 3.47% to $1.64 billion, a result the company attributed to higher selling prices and a favorable currency impact, even as weaker sales volumes limited the overall gain.
Looking ahead to 2026, PPG said it expects profit growth to be skewed toward the latter half of the year. Management projected flat to low-single-digit percentage profit growth in the first half of 2026, followed by an acceleration to high-single-digit percentage growth in the second half.
As part of efforts to strengthen margins, the company expects to realize $50 million in savings in 2026 tied to consolidation of its European manufacturing footprint and other structural reductions.
PPG highlighted several demand headwinds that have affected results. U.S. manufacturing activity slid to a 14-month low in the fourth quarter, the company noted, with new orders contracting further and input costs moving higher. PPG also pointed to the continued imprint of President Donald Trump's import tariffs on the manufacturing sector. In addition, a slowdown in home construction and purchases has reduced demand for building materials, including paints and coatings, weighing on companies that supply those markets.
The company emphasized that while selling price increases and currency movements supported sales growth in certain segments, weaker volumes constrained broader margin recovery. PPG's commentary places an emphasis on the timing of profit recovery, anticipating that stronger results will materialize in the second half of 2026 rather than evenly across the year.
Separately, the company noted its structural actions in Europe are expected to generate the targeted $50 million in savings next year as it consolidates manufacturing operations and implements other cost reductions. PPG did not provide additional numerical detail for the timing beyond the 2026 savings target.
Industry pressures cited by the company - including higher feedstock and energy costs, uncertain macroeconomic conditions, weakened manufacturing new orders and a slowdown in residential construction activity - are factors that have weighed on demand across its end markets and are shaping PPG's near-term outlook.
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