) earnings rose roughly 2.7% year over year to $1.14 per share in
the first quarter of 2014 from $1.11 per share a year ago.
Earnings for the first quarter include loss from acquisitions of
12 cents per share.
Barring loss associated with acquisitions, earnings of $1.26 per
share surpassed the Zacks Consensus Estimate of $1.08.
Sherwin-Williams, whose well-known brands include Dutch Boy,
Minwax and Krylon, recorded net sales of around $2,366 million in
the quarter, a 9.2% year-over-year rise. It exceeded the Zacks
Consensus Estimate of $2,360 million.
Increased paint sales volume of Sherwin-Williams' Paint Stores
Group and favorable impact of acquisitions led to higher sales in
the quarter. Acquisitions contributed 4.5% to the rise in
revenues in the quarter while currency swings had an unfavorable
impact of 1.9%.
Sherwin-Williams, in Sep 2013, completed its takeover of the
U.S. and Canadian businesses of Mexico's leading paint company,
Consorcio Comex S.A. de C.V., for $90 million in cash and assumed
liability of around $75 million. The Comex acquisition
contributed to better-than-expected results in the first
The Paint Stores Group unit registered net sales of $1.36
billion in the reported quarter, up 16.4% from the year-ago
quarter. The gain was led by increased architectural paint sales
volume across all end market segments and acquisition.
Net sales of the Consumer Group unit rose 5.4% to $325.3
million due to acquisitions and the timing of seasonal shipments
to some customers. Acquisitions increased net sales of the
segment by 3.9% in the reported quarter.
AKZO NOBEL NV (AKZOY): Get Free Report
PPG INDS INC (PPG): Free Stock Analysis
RPM INTL INC (RPM): Free Stock Analysis
SHERWIN WILLIAM (SHW): Free Stock Analysis
To read this article on Zacks.com click here.
Net sales from the Global Finishes Group segment went up 2.2% to
$497.6 million in the quarter due to higher selling prices,
partly offset by lower paint sales volume and unfavorable
The Latin America Coatings Group net sales fell 10% to $182.4
million as higher selling prices were offset by unfavorable
currency translation, which reduced sales by 16.5%, and lowered
paint sales volume.
Balance Sheet, Share Repurchases and Dividend
Sherwin-Williams' working capital ratio as of Mar 31, 2014, was
11% compared to 11.7% last year.
Sherwin-Williams acquired 1.3 million shares through open market
purchases in the reported quarter. The company had remaining
authorization to purchase 10.85 million shares as of Mar 31,
During the quarter, Sherwin-Williams hiked the quarterly dividend
to 55 cents per share from 50 cents per share.
Sherwin-Williams, which is among the leading paint companies
PPG Industries Inc.
Akzo Nobel NV
), expects consolidated sales to increase 8%-13% year over year
in 2014. At this level, the company reiterated its earnings
guidance in the band of $8.12 to $8.32 per share for the year.
This is below the current Zacks Consensus Estimate of $8.41.
The guidance assumes that the Comex acquisition will increase net
sales by a low-single-digit percentage in the year and negatively
impact earnings per share in the range of 45 cents to 55 cents
per share in 2014.
For the second quarter, Sherwin-Williams expects consolidated net
sales to rise 8%-14% year over year. The company expects earnings
per share in the range of $2.80 to $3.00 per share for the
quarter. The Zacks Consensus Estimate for the quarter currently
stands at $2.84. The guidance assumes that the Comex acquisition
will increase net sales in the range of $125 million to $135
million and unfavorably impact earnings per share by 10 cents in
the second quarter.
Sherwin-Williams is a Zacks Rank #3 (Hold) stock.
Another paint company
RPM International Inc.
) retains a Zacks Rank #2 (Buy).