PPG Industries reported first-quarter 2025 earnings that fell across most major metrics, but CEO Tim Knavish struck an optimistic tone, pointing to early momentum from the company’s long-term growth strategy—and to its history of navigating through economic upheaval like that unleashed by U.S. President Donald Trump’s aggressive tariff regime.
“Our business model has historically proven to be well positioned to navigate and perform during periods of uncertainty,” Knavish said in a call with Wall Street analysts.
Knivish said PPG should be resilient in the face of Trump’s recent tariff threats because it doesn’t rely on any single country, region, or end market, and primarily buys, makes, and sells locally.
“If you look at our U.S. businesses, our top 30 suppliers for our U.S. businesses, 0 of them are Chinese,” Knavish told analysts.
Knavish added that PPG could also raise prices if tariffs increase the cost of its inputs, such as oil.
“Our input cost model is very dependent on commodity materials, including oil, that are reliant on supply and demand. Historically, we have been successful in adjusting our selling prices, including through surcharges to account for any changes in our delivered cost of raw materials.”
Founded in 1883, PPG is the world’s second-largest coatings producer and a top player in nearly every end market it serves, including auto manufacturing, aerospace, and refinishing. The Pittsburgh-based paints and coatings giant operates in more than 70 countries and employs approximately 46,000 people. PPG Industries is #226 on the Fortune 500.
“We are beginning to realize the benefits from our enterprise growth strategy,” Knavish said in a statement, citing positive organic sales growth in the U.S.—after 6 quarters of declines or flat performance—and in Asia, and increases in both volumes and pricing. PPG had experienced 10 years of flat volume growth performance, Berenberg analyst Aron Ceccarelli noted in February.
PPG reported net sales of $3.68 billion for the quarter, a 4% decline from the year prior, impacted by foreign exchange rates and recent divestitures, including its silicas business, that together knocked down sales by 5%.
Organic sales—excluding the impact of currency exchange rates, acquisitions and divestitures—grew 1%. Net income dropped 7% to $375 million, or $1.64 per share, down from $1.71 a year ago.
PPG revenues and net income both beat analyst expectations, and shares opened up 7.2% the morning after it reported earnings.
The quarter marked the first since the company completed its divestiture of its U.S. and Canada architectural coatings business in December. The sale, part of a broader strategic refocus, leaves PPG with a more concentrated portfolio—now 75% of earnings come from its Performance and Industrial Coatings segments.
Among the three segments, Performance Coatings was the bright spot. Net sales rose 7% year-over-year to $1.27 billion, powered by demand in aerospace, traffic solutions, and marine coatings. Aerospace in particular set a new quarterly record, buoyed by strengthening global demand and a $300 million order backlog.
“Our Performance Coatings segment delivered 9% organic sales growth,” Knavish said, “with double-digit percentage growth in our aerospace coatings and protective and marine coatings businesses.”
By contrast, the Industrial Coatings segment posted an 8% revenue drop, to $1.56 billion, as global auto production softened. Automotive OEM sales were down mid-single digits due to weaker car manufacturing rates in North America and Europe, though PPG saw share gains in China and Brazil.
The Global Architectural Coatings segment, now limited to EMEA, Latin America, and Asia Pacific, saw sales drop 11% to $857 million. While prices were slightly higher, volumes fell and currency effects—particularly from the Mexican peso—took a toll.
Still, Knavish, who was promoted to CEO in 2023, said the company expects resumed investment in Mexico and improving demand trends in Europe, where organic sales were down just 1% after several soft quarters.
He did however note that PPG had begun to see a drop in demand in Mexico as spending was paused “due to recent geopolitical-related uncertainty”—i.e. Trump’s tariff threats—but it did not see customers in general rushing or cutting orders because of the imminent import duties.
Looking forward, Knavish reiterated full-year EPS guidance of $7.75 to $8.05.
