Tuesday, paints and coatings manufacturer Sherwin-Williams Co. (SHW) reported lower profit for its third quarter, as sales declined from last year, reflecting lower sales volume and unfavorable currency translation rate changes. The company also provided outlook for the fourth quarter and revised its fiscal 2009 guidance.
The Cleveland, Ohio-based company earned $175.21 million, compared to $177.08 million last year. Earnings per share improved to $1.51 from $1.50 per share in the year-ago quarter.
Number of outstanding shares at the end of September 30, 2009, were 115.7 million, down from 118.18 million as of September 30, 2008.
On average, 16 analysts polled by Thomson Reuters expected the company to report $1.35 per share for the quarter. Analysts' estimates typically exclude special items.
Acquisitions and currency translation rate changes reduced the latest quarter earnings per share by about $0.01 per share, while lower tax rate and purchases of treasury stock favorably impacted net income per common share by around $0.06 per share.
Net sales for the quarter dropped 12% to $1.997 billion from $2.269 billion in the same quarter last year. Nine analysts had consensus revenue estimate of $2.01 billion for the quarter.
Unfavorable currency translation rate changes decreased consolidated net sales by 1.6%, while acquisitions added less than 1.0% to consolidated net sales in the recent quarter.
Net sales in the Paint Stores Group dropped 13.5% to $1.221 billion in the quarter, hurt by continuing weak residential and commercial architectural paint sales volumes and lower sales in industrial coatings and non-paint categories partially offset by improving DIY customer sales.
Net sales of the Consumer Group decreased 7.1% to $330.5 million, due primarily to lower volume sales to most of the Group's retail customers.
Lower paint sales volume and unfavorable currency translation rate changes also dragged down the Global Finishes Group's net sales by 11.3% to $444.1 million in the latest quarter, partially offset by acquisitions and selling price increases.
Selling, general & administrative expenses fell to $654.25 million from $681.35 million in the prior year quarter.
For the first nine months of fiscal 2009, Sherwin-Williams posted earnings of $370.51 million or $3.17 per share versus $426.71 million or $3.57 per share last year. Net sales for the year-to-date period were $5.49 billion, lower than $6.28 billion in the comparable period a year ago.
Commenting on the third quarter and nine months financial results, Christopher Connor, Chairman and Chief Executive Officer, said, "While we remain disappointed with our sales, we are pleased with our earnings performance in the quarter resulting from the actions that have taken place within our operating segments to control costs, improve efficiencies, and maintain superior customer service."
Moving ahead to the fourth-quarter, Sherwin-Williams projects net income per common share to be in the range of $0.35 - $0.55 and consolidated net sales to be 8% to 12% below last year. Wall Street analysts estimate earnings of $0.61 per share, on revenues of $1.59 billion.
For fiscal 2009, the company narrowed its earnings outlook to a range of $3.52 - $3.72 per share from prior range of $3.30 - $3.80 per share. Consolidated net sales for the year are now expected to be 11.5% to 12.5% lower than 2008, compared to prior forecast of down 11% - 12.5%. Analysts estimate earnings of $3.64 per share, on revenues of $7.11 billion for full-year.
Among others in the industry, the Pittsburgh, Pennsylvania-based company PPG Industries Inc. (PPG) reported third-quarter net income attributable to PPG of $159 million or $0.96 per share, higher than prior-year's $117 million or $0.70 per share. Net sales in the third quarter declined 24% to $3.23 billion from $4.23 billion in the prior year quarter.
SHW is currently trading at $59.85, down $3.22 or 5.11%. For the past year, the stock traded in the range of $42.19-$64.13.
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