PPG Industries, Inc. (NYSE:PPG) Q3 2019 Earnings Conference Call - Final Transcript

Oct 17, 2019 • 02:00 pm ET


PPG Industries, Inc. (NYSE:PPG) Q3 2019 Earnings Conference Call - Final Transcript


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Good afternoon and welcome to the PPG Industries Third Quarter 2019 Earnings Conference Call. My name is Kary and I will be your conference specialist today. [Operator Instructions]

I would now like to turn the conference over to John Bruno, Director, Investor Relations. Please go ahead.

John Bruno

Thank you Kary and good afternoon, everyone. Once again, this is John Bruno. We appreciate your continued interest in PPG and welcome you to our third quarter 2019 financial results conference call. Joining me on the call from PPG are Michael McGarry, Chairman and Chief Executive Officer; and Vince Morales, Senior Vice President and Chief Financial Officer.

Our comments relate to the financial information released on Thursday, October 17, 2019. I will remind everyone that we have posted detailed commentary and accompanying presentation slides on the investor center of our website ppg.com. The slides are also available on the webcast site for this call and provide additional support to the up -- sorry, the opening comments Michael will make shortly. Following Michael's perspective on the company's results for the quarter, we will move to a Q&A session.

Both the prepared commentary and discussion during this call may contain forward-looking statements, reflecting the company's current view of future events and their potential effect on PPG's operating and financial performance. These statements involve uncertainties and risks, which may cause actual results to differ. The company is under no obligation to provide subsequent updates to these forward-looking statements.

This presentation also contains certain non-GAAP financial measures. The company has provided in the appendix of the presentation materials which are available on our website, reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures.

For additional information, please refer to PPG's filings with the SEC.

Now let me introduce PPG's, Chairman and CEO, Michael McGarry.

Michael H. McGarry

Thank you, John, and good afternoon everyone. We appreciate you joining our third quarter earnings call. Today we reported third quarter 2019 financial results. For the quarter, our net sales were about $3.8 billion and our adjusted earnings per diluted share from continuing operations were $1.67. Earnings were a record for any third quarter. Consistent with our improvement targets, we delivered strong year-over-year adjusted earnings per growth -- per share growth of 15%. Our earnings growth was driven by continued selling price realization and strong cost management. This quarter we accelerated our momentum in margin recovery with segment margins up about 220 basis points versus last year. As we stated in the past, our overall objective is to return to the aggregated segment margins that we maintain prior to this recent inflationary cycle and we believe this objective is achievable in 2020.

Now let me provide some additional color on our third quarter results. Our net sales in constant currency were higher than the prior year by about 2%. Sales volumes were down nearly 3% and were notably impacted by weak global industrial production that continue to affect global automotive production and most of our general industrial end use markets.