Monday, Masco Corp. (MAS), a home improvement and building products manufacturing company, reported a decline in net profit for the third quarter, reflecting higher losses from discontinued operations. Sales fell 17%, impacted by lower sales of new home construction products and services and a decline in consumer spending. However, the company raised its outlook for 2009.
The company, headquartered in Taylor, Michigan, reported net profit attributable to Masco Corporation of $28 million or $0.08 per share, compared with $33 million or $0.09 per share in the year-ago period. Net profit for the quarter totaled $40 million, down from $44 million in the year-ago quarter.
However, income from continuing operations attributable to Masco increased to $51 million from $35 million in the year-ago period. Earnings per share from continuing operations attributable to the company was $0.14 per share, compared with $0.09 per share in the prior year period.
On average, fourteen analysts polled by Thomson Reuters estimated earnings of $0.09 per share. Analysts' estimates typically exclude special items.
The company said its recent quarter results included costs and charges of $21 million pre-tax, or $0.04 per share, after tax, related to business consolidations, plant closures, headcount reductions, system implementations and other initiatives.
Net sales from continuing operations declined by 17% to $2.09 billion from $2.51 billion in the prior-year period. Twelve Wall Street analysts estimated revenues of $2.03 billion. Region-wise, North American sales declined 17% and International sales declined 13%.
The company said its results for the quarter were hit by lower sales volume of new home construction products and services, and a decline in consumer spending for home improvement products in both North American and International markets.
However, it added that negative market conditions were partially offset by increased sales volume of paints and stains, the improved relationship between selling prices and commodity costs and benefits associated with business rationalizations and other cost savings initiatives.
Selling, general and administrative expenses declined to $432 million from $454 million year-ago, while other expenses declined to $49 million from $56 million year-ago.
Year-to-date, the company's net income attributable to Masco Corporation dipped to $2 million or $0.00 per share from last year's $117 million or $0.31 per share. Year-to-date, net sales declined to $5.92 billion from $7.56 billion a year ago.
Masco said, while it is confident that the long-term fundamentals for the new home construction and home improvement markets are positive, it expects market conditions to be challenging over the near-term, as global economies recover.
The company currently estimates that its 2009 full-year results from continuing operations will range between a profit of $0.05 per share to a loss of $0.05 per share. According to the previous guidance issued, it expected a loss from continuing operations of $0.05 - $0.25 per share.
The company currently estimates that its sales for 2009 will decline approximately 18% to 20% compared with the year-ago. The company's previous guidance estimated that its full-year 2009 sales decline would be 18% to 22%.
The Street estimates earnings of $0.07 per share and revenues of $7.64 billion for the year.
Although the company is confident that the long-term fundamentals for the new home construction and home improvement markets are positive, its expects market conditions to be challenging over the near-term, as global economies recover.
MAS closed Monday's last trade on the New York Stock Exchange at $13.62, up 0.08 points or 0.59%. In the after hours the stock traded up 0.09 points or 0.66%.
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