Axalta Coating Systems (NYSE: AXTA) reported Q2 EPS of $0.31, $0.08 worse than the analyst estimate of $0.39. Revenue for the quarter came in at $1.1 billion versus the consensus estimate of $1.1 billion.

2017 Guidance Update

“In spite of uneven demand and some pricing concessions with certain customers during second quarter, we are working actively to address sources of pressure and deliver strong financial results. As some shortfalls in second quarter are not expected to be recovered, we are adjusting our financial guidance outlook, which also incorporates some benefit from our recent acquisitions,” said Robert W. Bryant, Axalta’s Executive Vice President and Chief Financial Officer. “Our existing business restructuring initiatives have been coupled with incremental pricing and cost actions to adjust for changes in certain customer requirements over the last quarter. We are encouraged that the business climate remains generally stable and believe that broadly supportive end-customer demand, together with our specific actions, will help us to deliver our revised full year targets.”

We are updating our outlook for the full year 2017 as follows, inclusive of the recently closed acquisitions:

• Net sales growth of 7-8% as-reported; 8-9% ex-FX, including acquisition contribution of 6-7%
• Adjusted EBITDA of $940-970 million
• Interest expense of ~$150 million
• Income tax rate, as adjusted, of 22-24%
• Free cash flow of $440-480 million
• Capital expenditures of ~$130 million
• Depreciation and amortization of ~$350 million
• Diluted shares outstanding of 246-249 million

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