PPG: 3 Key Takeaways for Long-Term Investors

PPG reported record earnings per share and 5% organic sales growth during its third-quarter 2026 earnings call on October 28, 2026. The company raised prices quickly to offset cost inflation, thus protecting operating margins even when commodity markets fluctuate. This strategy enabled PPG to expand high-demand divisions, such as commercial aircraft coatings, which currently have an order backlog near $300 million.

Management emphasizes three key points for long-term investors. Firstly, they raised selling prices rapidly to match the rising cost of goods sold, which directly impacts manufacturing expenses. By neutralizing cost inflation within six months, the company demonstrated its pricing power and maintained operational profit margins above 18%.

This achievement in just six months is half the time it took during the 2021 inflation cycle. Secondly, PPG is investing over $500 million in capital expenditures to increase production capacity and expand machinery. These funds are dedicated to growing sales, with management expecting more than $2 billion in sales this year, making it one of the company's larger businesses.

Lastly, PPG is focusing on software and application support, referred to as outside the can productivity solutions. These specialized offerings generate higher profit margins compared to traditional paint sales and now constitute a double-digit percentage of total revenue. The company's outside the can productivity solutions for customers are growing at three times the average growth rate of its portfolio, representing a solid double-digit percentage of total sales.

This expansion in software and application support, combined with disciplined capital allocation and continuous investment in high-margin technology, positions PPG for durable long-term growth and shareholder value creation.