Paints and coatings maker Valspar Corp. (VAL) reported Tuesday a profit for the second quarter that increased from last year, reflecting improved margins and revenue growth. Adjusted earnings per share for the quarter topped analysts' expectations, while quarterly revenues missed their estimates.
The company also raised its adjusted earnings guidance for the full-year 2012, citing anticipated further volume growth and continued execution of its key operational initiatives.
"We were pleased with our performance in the quarter. Our earnings growth was driven by new business in our industrial product lines, better price-to-cost balance, productivity improvements and benefits from last year's restructuring actions. Our volume trend improved sequentially in both our Coatings and Paint segments in the quarter," President and CEO Gary Hendrickson said in a statement.
The Minneapolis, Minnesota-based company reported net income of $76.54 million or $0.80 per share for the second quarter, higher than $56.31 million or $0.58 per share in the prior-year quarter.
The results for the latest quarter include $0.04 per share of restructuring charges, while the year-ago quarter included $0.05 per share of acquisition related charges, and $0.01 per share of restructuring charges.
Excluding items, adjusted net income for the quarter grew 31 percent to $0.84 per share from $0.64 per share in the year-ago quarter.
On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.82 per share for the quarter. Analysts' estimates typically excludes special items.
Net sales for the quarter increased 4.0 percent to $1.03 billion from $992.73 million in the same quarter last year, but missed nine Wall Street analysts' consensus estimate of $1.07 billion.
Coatings sales for the quarter increased to $540.83 million from $509.14 million in the year-ago quarter, and paint sales totaled $426.31 million, higher than $418.38 million a year ago.
Operating profit margin for the quarter improved 270 basis points to 12.7 percent as gross profit margin expanded 270 basis points and operating expense as a percentage of total sales remained flat.
The company also raised its adjusted earnings guidance for the full-year 2012 to reflect the anticipated further volume growth and continued execution of its key operational initiatives.
Looking ahead to fiscal 2012, the company raised its adjusted earnings guidance to a range of $3.20 to $3.30 per share from the prior forecast range of $2.92 to $3.12 per share. Street is currently looking for full-year 2012 earnings of $3.18 per share.
In Tuesday's regular trading session, VAL is currently trading at $48.40, down $1.38 or 2.77% on a volume of 0.26 million shares.
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