Cleveland, Ohio, January 26, 2007--Paintmaker and retailer Sherwin-Williams reported a 31 percent rise in fourth-quarter profit on Thursday as strength in industrial markets offset weakness in consumer sales.
The company forecast profit for the current first quarter that was in line with Wall Street estimates, and its shares rose more than 3 percent.
Saul Ludwig, an analyst with KeyBanc Capital Markets, said that although Sherwin-Williams was not immune from external factors such as housing weakness, the company was aided by cost controls, stock repurchases and price increases. "When you have dominant brands, you have pricing power," Ludwig said.
The company had fourth-quarter earnings of $98.7 million, or 73 cents a diluted share, compared with $75.1 million, or 54 cents a share, a year earlier.
Analysts, on average, expected quarterly earnings of 68 cents per share, according to Reuters Estimates.
Net sales for the quarter increased 4.9 percent to $1.79 billion, helped by higher prices. Sherwin-Williams noted that U.S. housing market weakness affected its paint stores and consumer group, but said industrial maintenance markets were strong.
Sales were up 5 percent at the paint stores and 11 percent in the global group. Those two divisions account for 84 percent of total sales.
But in the consumer segment, which accounts for about 16 percent of total revenue, sales fell 4 percent on sluggish demand among do-it-yourselfers.
The company forecast earnings of 80 cents to 85 cents a share for the first quarter and $4.55 to $4.65 per share for the full year. Analysts currently expect 84 cents a share for the first period and $4.41 for the year.
