PPG: 3 Key Takeaways for Long-Term Investors

On its third-quarter 2026 earnings call, held on Oct. 28, 2026, PPG (NYSE:PPG) reported record earnings per share and 5% organic sales growth. Raising prices quickly to offset cost inflation protects operating margins when commodity markets swing, giving the company the flexibility to expand high-demand divisions. Three key takeaways from management explain how the company is positioning itself for durable long-term growth.

1. Price Increases Fully Covered Inflation in Half the Time of Prior Cycles

Management raised selling prices quickly to match rising cost of goods sold, which represents the direct expenses of manufacturing paint. By neutralizing cost inflation within six months, the company proved its pricing power and kept operational profit margins above 18%.

Importantly, our commercial actions fully offset cost of goods sold inflation during the quarter. A significant milestone for us. We achieved this in just 6 months, half the time it took in the 2021 inflation cycle.
-- Timothy Knavish, Chairman and Chief Executive Officer

2. Aerospace Coatings Are Becoming a $2 Billion Growth Engine

Demand for commercial aircraft coatings remains high, generating an order backlog near $300 million. Management is directing over $500 million in capital expenditures, which are funds spent to upgrade factories and expand machinery, to increase production capacity.

This year, we expect to generate more than $2 billion in sales, making it 1 of our larger businesses. We are investing more than $500 million to expand capacity and improve productivity across the business.
-- Timothy Knavish, Chairman and Chief Executive Officer

3. High-Margin Services Beyond Paint Are Outpacing Core Sales Growth

The company is expanding its software and application support, known as outside the can productivity solutions, to solve customer bottlenecks. These specialized offerings carry higher profit margins than traditional paint sales and now generate a double-digit percentage of total revenue.

Additionally, our outside the can productivity solutions for PPG's customers are growing at 3x faster than the average growth rate of our portfolio. And with a higher margin profile and now represent a solid double digit percentage of our total sales.
-- Timothy Knavish, Chairman and Chief Executive Officer

Looking Ahead

Organic sales and cash flow continue to accelerate across key divisions, giving the company strong momentum heading into year-end. Management relies on its global distribution network and installed service base to capture market share, while keeping a close eye on raw material costs and global vehicle production.

We delivered outstanding organic sales growth driven by both volume and price, fully offset cost of goods sold inflation expanded earnings, delivered adjusted company EBITDA margin above 18%, and generated robust cash flow through disciplined execution across our portfolio.
-- Timothy Knavish, Chairman and Chief Executive Officer

Long-term value creation depends on disciplined capital allocation and continuous investment in high-margin technology. By balancing organic expansion in aerospace with potential portfolio optimization, the business aims to maximize shareholder returns.

We see meaningful opportunities to drive further organic growth through innovation, share gains, continued investment in our differentiated businesses. We will also selectively consider portfolio to accelerate our strategy and drive shareholder returns.
-- Timothy Knavish, Chairman and Chief Executive Officer

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