Sherwin-Williams Slashes its Outlook Again

Sherwin-Williams Co. on Tuesday again lowered its earnings guidance for the year following its acquisition of fellow paint maker Valspar Corp., and posted results for the latest quarter sharply below its estimates.

Shares in the company tumbled 10% to $250.20 in early trading.

For 2016, the company now expects earnings of $11.30 to $11.40 a share, including 95 cents in acquisition costs. The company had previously lowered its outlook to $11.65 to $11.85 a share. For the fourth quarter, the company forecast earnings of $1.45 to $1.55 a share, including 68 cents in acquisition costs.

Valspar, a consumer-focused paint maker that distributes its products through home-improvement chain stores such as Lowe's Co. and Ace Hardware, in June approved the company's sale to Sherwin-Williams for more than $9 billion—Sherwin's biggest acquisition ever.

In all for the quarter, Sherwin posted a profit of $386.7 million, or $4.08 a share, up from a profit of $374.5 million, or $3.97 a share, a year prior. The quarter's results included a 24-cent per-share charge for acquisition costs and a 9-cent tax benefit.

Revenue rose 4% to $3.28 billion, in line with analyst estimates, according to Thomson Reuters.

The company had projected earnings of $4.10 to $4.30 a share in the current quarter, including 20 cents of acquisition-related costs and 10 cents of tax benefits.

Sales in paint stores rose 6.7% to $2.23 billion, thanks to higher architectural paint sales volume across most end market segments and a change in revenue classification. In the latest quarter, sales for stores open for more than 12 months increased 2.1% from a year ago. The segment's profit rose 2.1%.

The company's consumer segment saw sales slip 2.1% to $412.9 million, on lower volume sales to most of retail and commercial customers. The segment's profit, however, improved 4.2% on operating efficiencies and higher volume.

Global finishes sales in U.S. dollars fell 1.1% to $480.7 million. Unfavorable currency rates shaved 1.5% off sales. Profit rose 15% in the segment is U.S. dollars.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

October 25, 2016 10:35 ET (14:35 GMT)

Sherwin Williams (NYSE:SHW)
Historical Stock Chart
From Mar 2024 to Apr 2024