Masco Corp.'s (MAS) second-quarter profit tumbled 95% on restructuring and investment charges, although the building-products maker managed to posted its second consecutive quarterly sales increase after a string of declines.
Shares fell 0.6% to $11.86 in after-hours trading as revenue was short of analysts' expectations. As of the market's close, the stock was down 14% this year.
The maker of KraftMaid kitchen cabinets, Delta faucets and Behr paint reported sales in North America and abroad each increased by 2%, with international sales rising 8% excluding currency fluctuations.
Masco's top line depends on people's willingness to buy new homes and renovate, the kind of spending that slid dramatically in the housing and economic downturns. The company closed facilities and cut jobs to cope, and it has lately seen a modest improvement in the markets for many of its products.
Housing fundamentals have seesawed for months, as a government home-buyer tax credit helped bolster sales, although the offer expired on April 30, likely leading to a softening U.S. housing market. Meanwhile, persistently weak labor conditions make it hard for consumers to justify big purchases.
Masco posted a profit of $3 million, or a penny a share, down from $55 million, or 15 cents a share, a year earlier. Excluding charges related to cost-savings initiatives and write-downs, earnings fell to 16 cents from 17 cents as revenue climbed 1.7% to $2.05 billion.
Analysts surveyed by Thomson Reuters projected a profit of 13 cents on revenue of $2.13 billion.
Gross margin fell to 26.7% from 27%, but grew to 28.4% from 27.4% on an adjusted basis. The prior year also had an $8 million tax benefit.
The latest period was helped by higher sales volume of plumbing products, windows and paints and stains, and a more favorable product mix of paints and stains. Masco said those positives were partially offset by lower sales volume of cabinets and a competitive pricing environment.
Chief Executive Tim Wadhams said after a relatively slow start to the year, sales were strong in March and April from year-ago levels. But he warned that economic activity related to Masco's markets, particularly consumer spending and new home building, has slowed. Wadhams said the company was confident that long-term home improvement and construction fundamentals were positive.
-By John Kell, Dow Jones Newswires; 212-416-2480; email@example.com