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09/07/2021

PPG says disruptions will impact Q3 sales

The paint giant points to supply shortages, logistics issues, and inflation in raw materials.
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PPG reported today that it expects sales in the third quarter to be lower by approximately $225 to $275 million.

The Pittsburgh, Pa.-paint and coatings manufacturing giant said sales volumes are being impacted by the increasing disruptions in commodity supplies.

Hurdles impacting sales include reductions in customer production due to parts shortages such as semiconductor chips and continuing logistics and transportation challenges in many regions, including the U.S., Europe and China. 

Also, raw material inflation for the third quarter is trending higher than previously communicated by about $60 million to $70 million, PPG noted.

The coatings commodity supply disruptions have continued to deteriorate since the company’s earnings announcement on July 19, due to several additional lower material allocations from certain suppliers. The company also continues to assess the full impact of Hurricane Ida, which could include additional supply chain effects.

According to PPG, demand continues to be “robust” but many of the company’s end-use channels are at very low levels. 

When supply conditions normalize, the company continues to expect strong sales growth into 2022. In addition, the company reported that it continues to make measurable progress implementing selling price increases to help offset the elevated raw material costs, and is seeking further increases. 

Overall price increases for the third quarter are estimated to be about 5% with similar contributions from both operating segments.

PPG reported record second quarter 2021 net sales of approximately $4.4 billion, nearly 45% higher than sales of $3 billion in the second quarter of 2020.

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