Axalta Releases 3Q 2020 Results

Third-quarter net sales of $1,026.9 million decreased 7.2 percent year-over-year, including a 0.1 percent foreign currency benefit, driven by 6 percent lower volumes and 1.4 percent lower average price and product mix.

Lower volumes across all end-markets were driven by ongoing COVID-19 related macroeconomic impacts, though volumes improved considerably through the quarter and exceeded earlier expectations due to faster recovery pacing in key end-markets.Performance Coatings recorded a 5.7 percent net sales decline, including nearly flat Industrial net sales versus the prior-year quarter, while the Refinish net sales decline of 9 percent showed strong recovery ahead of expectations.

The 10.2 percent net sales decline for Transportation Coatings benefited from faster than expected recovery in Light Vehicle production, most notably in North America and China.  Axalta posted 1.4 percent headwinds in year-over-year price and product mix, still impacted by abnormal product mix given substantial product and geographic mix differences from the prior year given overall volume declines.          

Income from operations for Q3 2020 totaled $141.7 million versus $123 million in Q3 2019. Net income to common shareholders was $82.5 million for the quarter compared with $65.5 million in Q3 2019, and diluted earnings per share were $0.35 compared with $0.28 in Q3 2019. The increases were primarily driven by lower operating expenses inclusive of cost actions taken this year in response to COVID-19 and favorable variable input costs, offset partly by lower global net sales across all end-markets.

Additionally, income from operations was negatively impacted by termination charges of $35.7 million associated with the company's recently announced restructuring plan which compares to a $29.2 million charge in Q3 2019.