Masco Q3 Profit Falls, but Raises Outlook (MAS)

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Home improvement and building products maker Masco Corporation (MAS) on Tuesday said that its third quarter profit fell 15% from last year, hurt by one-time items and sharply lower sales.

The Taylor, Michigan-based company reported third quarter net income of $28 million, or 8 cents per share, down from $33 million, or 9 cents per share, in the year-ago quarter. Sales plunged 17% from last year, to $2.09 billion.

On average, Wall Street analysts expected a slightly bigger profit of 9 cents per share, but on lower revenue of $2.03 billion.

To combat the economic recession, the maker of cabinets, paints, and wood stains said it will continue to close plants, cut jobs, and consolidate businesses.

Looking ahead, the company raised its full-year outlook to a loss of 5 cents per share to a profit of 5 cents per share. Previously, it had forecast a loss of 25 cents to a loss of 5 cents per share. It also said it expects sales to fall 18% to 20%, compared to a prior outlook for a 20% to 22% sales drop.

Masco shares were mostly flat in morning trading Tuesday.

The Bottom Line
We removed shares of MAS from our “recommended” list last Sept.23, when the stock was trading at $17.87. The company has a dividend yield of 2.20%, based on last night’s closing stock price of $13.61. The stock has technical support in the $10 price area. If the shares can firm up, we see overhead resistance around the $15 price level. We would remain on the sidelines for now.

Masco Corporation (MAS) is not recommended at this time, holding a Dividend.com DARS™ Rating of 2.9 out of 5 stars.

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