Glass half full
Clear evolution at PPG
Good morning, diligent analysts. This is your Stock Market Rundown for April 30th, 2024. Thank you so much for reading. Let’s get into it:
TODAY’S TOP STORY: TRANSPARENT STRATEGY
A business with the name “Pittsburgh Plate Glass Company” that doesn’t manufacture plate glass is, well, confusing. But the story behind it just demonstrates how much an industry can change over the course of a century.
When Pittsburgh Plate Glass was founded in 1883, it was among the first in the US to mass-produce plate glass. It soon became the country’s largest plate glass maker, supplying the landmark skyscrapers popping up in America’s booming cities.
Flush with cash, it expanded into paints and chemicals. In the 1950s, the company introduced lead-free house paints that the postwar generation used to spruce up their picket fences. Prudent diversification, because by the 1960s, the historic plate process was becoming obsolete.
In 1968, Pittsburgh Plate Glass changed its name to the initials “PPG”, to downplay the glass business. (It was just like when Kentucky Fried Chicken adopted “KFC” as its official name, in a ploy to move focus away from the “fried” part.)
In 2016, PPG completely exited the glass business. These days, the company focuses on manufacturing high-margin specialty industrial and performance coatings. That generates a gusher of cash flow to pay out dividends. In fact, the company has upped its dividend in each of the past 52 consecutive years.
A lot may have changed at PPG over the decades, but at least they can say they’ve been paying dividends since Watergate was in the headlines and the Beatles were on tour.
SO WHAT ELSE IS GOING ON?
Luxury fashion house Kering warned that operating profit will plunge this year due to its customers spending less on its flagship brand, Gucci. Hey, not everybody appreciates menswear looks that resemble a disco ball or head-to-toe tinfoil.
UPS posted higher-than-expected profits thanks to paring back expenses. The business is cutting costs by so much, next quarter they might revert to delivering packages by Pony Express.
JP Morgan CEO Jamie Dimon is positive on the US economic outlook, commenting: “even if we go into recession the consumer’s still in good shape.” That’s kind of like saying you’re confident your umbrella will hold up even in a hurricane.
Tobacco company Philip Morris beat expectations on booming sales of Zyn. These things come in flavors like mint, citrus, and coffee—I don’t know whether I’m getting my nicotine fix or buying a scented candle.
That's a wrap for today, crew. Tomorrow morning, the saga continues. Yours in capitalism, The Axe
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