Paint and coatings maker Valspar Corp. (VAL) Tuesday reported higher profit for the second quarter that topped estimates, while revenues came short of expectations. The company backed its full year earnings outlook.
Net income for the quarter rose to $76.91 million or $0.84 per share from $76.54 million or $0.80 per share in the prior year.
Excluding restructuring charges, net income was $0.91 per share, while it totaled $0.84 per share last year. On average, 15 analysts polled by Thomson Reuters expected earnings of $0.90 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales were flat with last year at $1.03 billion and fell short of Street view of $1.05 billion.
In the Coatings segment, net sales slid 1 percent to $537 million. According to the company, sales growth in packaging, wood and coil coatings was offset by lower demand in the general industrial product line, primarily for off-road equipment, shipping container and pipeline coatings products.
Net sales in the Paints segment advanced 3 percent to $438 million, primarily due to volume and sales growth in North America.
Gary Hendrickson, CEO, said, "We saw improving momentum in the U.S., driven by solid performance in our consumer paints, packaging, wood and coil product lines. The strengthening U.S. housing market, coupled with our continued new business initiatives, should provide further improvements in the second half of the year.''
The company also announced restructuring actions focused on improving its North American paint manufacturing footprint. These actions are expected to result in total non-recurring charges of $18 to $23 million after tax in fiscal 2013 and 2014.
When fully implemented, these actions are expected to generate annual savings of around $0.10 per share by fiscal 2015.
The firm backed its full year adjusted earnings per share guidance of $3.60 to $3.80 issued in February. Analysts look for full year earnings of $4.17 billion.
In February, Valspar cut its earnings per share outlook to $3.60 to $3.80 per share from the previous estimate of $3.65 and $3.85 per share, anticipating that weak demand in certain international markets would continue.
The stock closed at $67.86 on Monday.
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