Masco Corp. (MAS) narrowed its first-quarter loss on a sales turnaround to modest growth and better margins, but the building-products maker failed to break even as analysts expected.
The company, maker of KraftMaid kitchen cabinets, Delta faucets and Behr paint, Monday posted its first quarterly sales increase in several years. North American revenue was flat, but international sales rose 16%, or 9% excluding currency fluctuations.
Masco's top line depends on people opening their checkbooks to buy new homes and renovate, the kind of spending that plummeted in the housing and economic downturns. It closed facilities and cut jobs to cope and lately has started to see modest improvements in the markets for most of its products.
Although new-home sales fell in both January and February, they surged higher by more than a quarter in March, their largest year-on-year increase in nearly five years, according to data from the U.S. Commerce Department.
Chief Executive Tim Wadhams confirmed Monday that business picked up at the end of the quarter after a slow start, giving Masco strong momentum as it moved into the current quarter, particularly on the retail side. He also said the company gained market share.
Masco posted a loss of $7 million, or 2 cents a share, narrowing from a year-earlier loss of $74 million, or 23 cents a share. Revenue increased 3.1% to $1.85 billion.
Analysts surveyed by Thomson Reuters had predicted break-even results on $1.81 billion in revenue.
Gross margin rose to 26.6% from 23%.
Sales volume of plumbing products and windows helped drive the results, as did a more favorable paints-and-stains product mix and a better margin between selling price and commodity costs. But installation and other services had lower sales volume and some products sold for lower prices.
Shares in Masco were down 0.2% at $17.97 after hours. The stock has risen 78% from a year ago, when it was on the mend from an all-time low.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; email@example.com