PPG Industries (PPG) – Get Report shares fell Tuesday after the paint and industrial coatings maker reported weaker-than-expected adjusted earnings for the second quarter.
Net income of the Pittsburgh company reached $431 million, or $1.80 per share, in the last quarter, compared to $102 million or 43 cents per share in the same quarter last year.
Latest adjusted earnings totaled $1.94 per share, below the analyst consensus of $2.20, derived from a FactSet survey.
Revenue registered $4.36 billion for the quarter, up 44% from $3.02 billion a year earlier and ahead of FactSet’s analyst consensus of $4.34 billion.
Revenue from a year earlier was held back by the COVID pandemic, which severely hampered business activity.
PPG shares recently traded at $155.06, down 6.5%. It was up 14% in the six months to Monday.
The company’s profits suffered from supply chain disruptions and price increases for raw materials and transportation. And it will likely remain that way throughout the quarter, Chief Executive Michael McGarry said in a statement.
But “[overall] economic demand growth remains very broad and robust and, as delivery conditions normalize, we expect strong sales growth later this year,” he said.
Analysts’ reactions were mixed. They acknowledged the weakness, but some said the underlying fundamentals of PPG were strong.
“PPG can languish until its crude supply issues are resolved and PPG shows it can catch up with inflation,” BMO’s John McNulty said, according to Bloomberg.
But some “firmly recovering end markets” and recent acquisitions should drive strong growth for PPG in the coming year, he said.
McNulty has an outperform rating and a price target of $197 on PPG.
In the first quarter, PPG’s results exceeded analyst expectations and received positive reviews from a number of Wall Street analysts.