A global maker of paints and coatings, supplying decorative paints (with brands like COMEX and TIKKURILA), automotive and aerospace finishes, and specialty products such as TESLIN substrate, used by contractors, automakers, and manufacturers. Founded in 1883 as the Pittsburgh Plate Glass Company, it became the first commercially successful U.S. plate-glass producer. Its Pittsburgh headquarters, PPG Place, is a glittering glass complex built to reflect the company's glassmaking roots.
PPG's Q2 2026 income before tax fell 5% as a double-digit drop in auto refinish offset aerospace and architectural gains.
Automotive refinish coatings, a core profit driver, posted a double-digit sales decline that pulled overall earnings lower. rose 7% to $4.5 billion and widened 0.3 points to 42.1%, but income before tax fell 5% to $569 million as the refinish drop outweighed growth in aerospace and Latin American architectural coatings. The company expects price increases to offset raw material inflation by year-end, but the refinish weakness and a pending $350 million Brazilian court judgment leave the path forward uneven.
Key takeaways
Income before income taxes fell $29 million, or 5%, to $569 million, as a double-digit decline in automotive refinish coatings—attributed to difficult prior-year order patterns—offset earnings growth in aerospace and architectural coatings in Latin America.
Consolidated rose 7% to $4.5 billion, driven by higher selling prices (+2%), higher volumes (+2%), and favorable (+2%).
Performance Coatings income fell 8% to $329 million, with the automotive refinish decline more than offsetting high-single-digit aerospace growth and double-digit protective and marine coatings growth.
Section summaries
Management's Discussion and Analysis
Q2 2026 net sales rose 7% to $4.5B on higher prices, volumes, and FX, but income before tax fell 5% as auto refinish volume declines offset aerospace and architectural gains.
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Consolidated increased 7% to $4.5B, driven by higher selling prices (+2%), higher sales volumes (+2%), and favorable (+2%).
Global Architectural Coatings income rose 16% to $185 million, led by higher selling prices, favorable currency translation, and volume growth in Latin America.
Year-to-date improved by $223 million to $592 million, driven by improved performance, while financing cash outflows rose $815 million largely due to the repayment of $700 million in maturing notes.
The company expects selling price increases and productivity initiatives to fully offset cost of goods sold inflation by the fourth quarter of 2026, with automotive refinish trends improving in the second half.
What changed
The Delaware Chancery Court trial over the Di Gregório indemnification concluded in May 2025 with post-trial argument in July 2025; a final decision on whether Westlake bears the approximately $350 million Brazilian judgment is now expected in 2026, leaving the exposure unresolved.
The Cadogan Clean Water Act civil penalty and attorneys' fee claims remain pending a court decision and Special Master review, with no resolution reported this quarter.
widened 1.3 points sequentially to 42.1%, a positive move after Q1 2026's 40.8%, as pricing actions began to take hold against the mid-single-digit raw material inflation flagged last quarter from Middle East conflict disruptions.
of $33 million in Q1 2026 recovered to $387 million in Q2 2026, though the year-to-date figure of $592 million still trails the $700 million-plus quarterly run rate seen in late 2025.
What to watch
Final Delaware Chancery Court decision in 2026 on whether Westlake must indemnify PPG for the approximately $350 million Di Gregório Brazilian judgment.
Court ruling in the Cadogan Clean Water Act civil penalty and attorneys' fee suit after the June 2024 trial and Special Master review.
Q3 2026 automotive refinish volume trajectory against management's expectation of improving trends in the second half of 2026.
Q3 2026 as the up to 20% price increases implemented to counter Middle East-driven raw material inflation flow through the income statement.
Income before income taxes decreased $29M to $569M, as earnings growth in aerospace and architectural coatings Latin America was offset by lower sales volumes in automotive refinish coatings.
Performance Coatings fell 8% to $329M, primarily due to a double-digit decline in automotive refinish coatings from difficult prior-year order patterns.
Global Architectural Coatings rose 16% to $185M, driven by higher selling prices, favorable FX, and cost-control actions, with Latin America volume growth a key contributor.
Cash from operating activities improved $223M to $592M year-to-date, driven by improved performance, while cash used for financing increased $815M largely due to repayment of $700M in maturing notes.
The company expects selling price increases and productivity initiatives to fully offset by Q4 2026, and anticipates continued strength in aerospace with improving auto refinish trends in H2.
Quantitative and Qualitative Disclosures About Market Risk
PPG's market risk is primarily driven by foreign currency and interest rate exposures, managed through derivatives and debt structure.
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Foreign currency forward contracts hedge , with a potential $430 million adverse impact on pre-tax income from a 10-20% adverse rate shift as of mid-2026.
Cross currency swaps with a $375 million hedge euro exposure; a 10% euro appreciation would reduce their fair value by $37 million.
Non-U.S. dollar borrowings of $4.4 billion expose PPG to , with a 10-20% dollar weakening causing $489 million in unrealized losses.
Interest rate swaps convert $375 million of fixed-rate debt to variable; a 10% rate rise would increase annual by $2 million.
A 10% rate increase on all variable-rate debt would raise annual by $4 million, while a 10% rate decrease would boost fixed-rate debt fair value by $81 million without affecting income or cash flows.
PPG faces a $350M+ Brazilian cargo-fire judgment, a Clean Water Act penalty trial, and ongoing asbestos and ethylene oxide claims.
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A Brazilian court entered an award against PPG (as nominal defendant) in the Di Gregório litigation, with Westlake estimating the final amount at approximately $350 million including simple .
Westlake, which assumed the Di Gregório liability under a 2012–2013 separation, has informed PPG it will not post a bond, pay the judgment, or prevent execution against PPG.
PPG sued Westlake in Delaware Chancery Court for and ; a bench trial concluded in May 2025, post-trial argument occurred in July 2025, and a final decision is expected in 2026.
A citizens’ suit by Sierra Club and PennEnvironment over PPG’s former Cadogan disposal site is awaiting a court decision on a civil penalty under the Clean Water Act, while a Special Master reviews plaintiffs’ attorney-fee motion.
PPG states the risk of loss from the Westlake contract dispute is remote and that it has adequate insurance for many personal-injury claims, though some insurers are contesting coverage.