Sherwin-Williams Slashes its Outlook Again
October 25 2016 - 10:50AM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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