) adjusted earnings of 4 cents per share in the fourth quarter of
2012 beat the Zacks Consensus Estimate of a loss of 1 cent by a
wide margin. Results were significantly better than the
prior-year quarter loss of 9 cents, driven by an increase in
sales and operating margins, especially in North America.
ARMSTRONG WORLD (AWI): Free Stock Analysis
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MASCO (MAS): Free Stock Analysis Report
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Masco's net sales of $1.89 billion in the reported quarter were
also ahead of the Zacks Consensus Estimate of $1.81 billion by
4.4%. Revenues rose 8.6% year over year driven largely by sales
increase in North America as the higher demand for new homes led
to increased demand for Masco's products. The increase in sales
is attributed to improvement in the new home construction market
in North America, new product launches, and higher selling
North American sales increased 12% year over year, driven by
improved housing market. International organic sales rose 2% due
to improved sales in retail and international channels.
Adjusted operating profit was $94 million in the fourth quarter
of 2012, up significantly from $27 million in the prior-year
quarter, driven by improved price commodity mix and solid volume
rise. Adjusted operating margin increased to 5.0% in the quarter,
up 340 basis points from the prior-year quarter, owing to strong
operating leverage, pricing improvement and total cost
Adjusted gross profit grew 24.5% to $473 million in the quarter.
Gross profit margins were 25.0%, up 310 basis points in the
quarter. The strong results were driven by the cost control and
supply chain strategies adopted by the company.
Cabinets and Related Products:
The Cabinets and Related Products segment revenues were $289
million in the fourth quarter, up 1% year over year, due to a 13%
rise in sales in North America, driven by solid business in
countertop, retail, dealer and builder channels. The segment
operating loss of $26 million improved from the prior-year
quarter loss of $38 million.
The segment recorded revenues of $739 million in the fourth
quarter of 2012, up 10% year over year, driven by solid business
in North America as well as international markets. The segment
also benefited from the introduction of new products and programs
in the quarter. Segment operating profit of $72 million improved
from the prior-year quarter by 28.6%.
Installation and Other Services:
Installation and Other Services segment revenues were $323
million in the quarter, up 13% year over year, owing to a rise in
construction of new homes, growth in retro sales and commercial
sales. Segment adjusted operating profit of $6 million improved
from the prior-year quarter loss of $6 million.
Decorative Architectural Products:
Decorative Architectural Products segment revenues were $386
million in the quarter, up 11% year over year, owing to improved
business in core products and launch of new programs. Segment
adjusted operating profit of $65 million improved 85.7% from the
Other Specialty Products:
Other Specialty Products segment revenues were $153 million in
the quarter, up 6% year over year, driven by an increase in
market share.The segment reported adjusted operating profit of $7
million compared to a flat growth in the prior year quarter.
Full Year 2012
Masco Corporation's adjusted earnings of 32 cents per share for
full year 2012 beat the Zacks Consensus Estimate of 27 cents.
Earnings increased significantly from the prior-year quarter
earnings of 2 cents, driven by an increase in new home
construction activity in North America.
Masco's net sales of $7.75 billion for full year 2012 were up 4%
year over year, driven by increase in new home construction
activities in North America and a number of product innovations.
The company expects to continue its strategy of brand building,
cost control, improving liquidity position and growth in the
Installation and Cabinet segments in the upcoming quarters.
However, management is apprehensive about the weak big ticket
Masco Corporation carries a Zacks Rank #3 (Hold).
Many other stocks in the sector are currently performing well.
Armstrong World Industries, Inc.
) with a Zacks Rank #1 (Strong Buy) and
Drew Industries Inc.
) with a Zacks Rank #2 (Buy).