Paint maker Sherwin-Williams Co. (SHW) on Thursday reported a 27 percent increase in profit for the second quarter, driven by volume and sales price increases across key segments. Earnings per share beat analysts estimates, while revenues missed their expectations.
Looking ahead, the company forecast earnings for the third quarter in line with analysts' estimates and raised its earnings outlook for fiscal 2012.
Segment wise, Paint Stores Group sales rose 15 percent from last year to $1.49 billion, due primarily to higher paint sales volume across all end market segments as well as selling price increases. In terms of stores open for over a year, net sales were up 13.9 percent in the quarter.
Net sales at the Consumer Group segment grew 6 percent from last year to $397.7 million, reflecting selling price increases and higher volume sales to most of the Group's retail customers. Global Finishes Group net sales in U.S. dollars rose 3.3 percent to $498.7 million.
However, Latin America Coatings Group sales declined 4.5 percent to $187.3 million, due primarily to unfavorable currency translation rate changes that were partially offset by selling price increases and higher paint sales volume.
Sherwin-Williams' second-quarter net income was $227.81 million or $2.17 per share, up from $179.12 million or $1.66 per share in the same quarter last year.
On average, seventeen analysts polled by Thomson Reuters expected the company to earn $2.12 per share for the quarter. Analysts' estimates typically exclude special items.
The maker of Dutch Boy, Minwax, and Thompson's Water Seal brand paints said net sales for the quarter rose 9.3 percent to $2.57 billion from $2.35 billion in the prior-year period. Analysts had a consensus revenue estimate of $2.66 billion.
Looking ahead to the third quarter, Sherwin-Williams forecasts earnings per share in a range of $2.05 to $2.20 per share, compared to earnings of $1.71 per share in the year-ago period.
The company projects consolidated net sales for the quarter will increase in the mid single digits compared to the year-ago period.
Analysts expect the company to report earnings of $2.15 per share for the quarter on revenues of $2.74 billion.
For fiscal 2012, Sherwin-Williams raised its earnings outlook to a range of $6.20 to $6.40 per share from the prior range of $5.75 to $6.05 per share. This compares to earnings of $4.14 per share in the prior year.
The company still expects consolidated net sales for the year to increase above 2011 levels by a high single digit-to-low-teens percentage.
Analysts expect the company to earn $6.27 per share for the year on revenues of $9.81 billion.
In Thursday's regular session, SHW is trading at $124.02, down $3.63 or 2.84 percent on a volume of 1.09 million shares.
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