) will report its second-quarter 2014 results ahead of the opening
bell on Jul 17. Last quarter, the Pennsylvania-based company
delivered a roughly 5.3% positive surprise on continued strength in
its coatings business and its cost management initiatives.
PPG Industries has beaten the Zacks Consensus Estimate in the
trailing 4 quarters with an average beat of around 4.7%. Let's see
how things are shaping up for this announcement.
Factors to Consider
We expect PPG Industries to benefit from healthy momentum across
aerospace and automotive OEM markets in the second quarter.
Moreover, PPG Industries' cost containment measures through its
restructuring program should lend support to its earnings in the
Moreover, PPG Industries will continue to gain from cost synergies
from acquisitions including
) North American architectural coatings business which it bought
last year. The acquisition has reinforced its branded paint product
offerings and scale in the North American architectural paint
In addition, the recently announced buyout of Mexico's leading
paint company - Consorcio Comex S.A. de C.V. - for $2.3 billion is
a significant move by PPG Industries as it will reinforce its
architectural coatings business in Mexico and Central America by
offering a leading architectural coatings portfolio. The company
expects the transaction to be immediately accretive to its earnings
and deliver meaningful synergies.
However, some of the end markets such as non-residential
construction and marine coatings remain somewhat sluggish. While
the company is seeing modest improvements in Europe of late, it may
continue to witness softness in construction markets in the region,
especially in Western Europe.
Our proven model shows that PPG Industries has the right
combination of two key ingredients to beat earnings.
Positive Zacks ESP:
(Expected Surprise Prediction) for PPG Industries is +0.36% - the
difference between the Most Accurate estimate of $2.80 and the
Zacks Consensus Estimate of $2.79. This indicates a likely positive
Zacks Rank #3 (Hold):
PPG Industries' Zacks Rank #3 increases the predictive power of its
Note that stocks with Zacks Ranks of #1, 2 and 3 have a
significantly higher chance of beating earnings. The Sell rated
stocks (#4 and 5) should never be considered going into an earnings
Stocks That Warrant a Look
Here are some other chemical companies you may want to consider as
our model shows they have the right combination of elements to post
an earnings beat this quarter:
LyondellBasell Industries NV
) has earnings ESP of +3.13% and holds a Zacks Rank #2 (Buy). It is
slated to report on Jul 25.
) has earnings ESP of +1.63% and carries a Zacks Rank #3 (Hold). It
is scheduled to report on Jul 17.
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