Posted on April - 22 - 2010
Sherwin-Williams sees dip in first-quarter earnings, but raises full-year guidance
Sherwin-Williams Co. (NYSE: SHW) said net income fell slightly in its first quarter from a year earlier, but the Cleveland-based paintmaker raised its earnings guidance for the year.
The company reported earnings of $32.6 million, or 30 cents a share, for the quarter ended March 31, compared with net income of $37.3 million, or 32 cents per share, in the like period a year ago. Sales rose 1%, to $1.57 billion.
Sherwin-Williams said net income in the latest first quarter included a charge of 10 cents a share for income tax expenses related to the health care bill passed by Congress last month.
Sales in the company’s Paint Stores Group decreased 5.3% to $850.9 million in the quarter, due primarily to a decline in paint sales volume and corresponding weakness in non-paint sales, the company said. Sales in the Consumer Group increased 1.4% to $292.1 million in the quarter, as new product introductions partially offset soft demand.
Christopher M. Connor, chairman and CEO of Sherwin-Williams, said sales in the quarter “were slightly stronger than we anticipated, although domestic demand remains soft.” He said Paint Stores Group volume “decreased at the lowest rate since the fourth quarter 2008 due to improvements in certain architectural segments.”
The rest of the year is looking better.
“For the second quarter, we anticipate that our consolidated net sales will increase a high single-digit percentage compared to last year’s second quarter,” Mr. Connor said. The company expects second-quarter net income to be in the range of $1.55 to $1.70 per share compared with $1.35 per share in 2009.
For all of 2010, Sherwin-Williams expects sales to increase above 2009 levels “by a mid-to-high single digit percentage.” With annual sales at that level, Mr. Connor said, “We have raised our expectation for diluted net income per common share for 2010 to be in the range of $4.20 to $4.60 per share, including the unfavorable tax impact of health care legislation, compared to $3.78 per share earned in 2009.”
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