Cleveland, OH, April 15--Sherwin-Williams said its first-quarter net income will surpass earlier forecasts because of higher-than-expected sales. The company also raised its outlook for the year.
Sherwin-Williams said it now expects to record earnings of 58 cents per share for the quarter, significantly higher than its February prediction for profit of 48 cents to 53 cents per share.
During the first-quarter of 2004, Sherwin-Williams earned 35 cents per share on sales of $1.32 billion. Sherwin-Williams said 10 cents of the increase came from improved operations, while 4 cents came from acquisitions and 9 cents from a lower tax rate.
Analysts expect earnings of 48 cents per share, according to a Thomson Financial survey.
Shares of the company rose $1.94, or 4.5 percent, to $45.45 in morning trading on the New York Stock Exchange.
Sherwin-William said quarterly sales grew about 17 percent from the same period a year ago, outpacing its prediction for growth in the low double digits. Analysts currently expect sales to grow about 11 percent to $1.46 billion.
The company said revenue was driven by sales of domestic architectural paint sales to contractors and do-it-yourself customers, along with improved industrial maintenance and product finishes sales.
However, Sherwin-Williams noted that profit margins declined slightly, mostly because of higher raw material costs that were only partially offset by price increases and better factory utilization.
For the year, the company predicted profit of $3.10 to $3.20 per share, above its earlier forecast for earnings of $3 to $3.10 per share. Sherwin-Williams said sales will increase by a percentage in the low-to-mid teens. Analysts currently expect earnings of $3.08 per share, with sales growing 10 percent to $6.7 billion.
The company plans to report first-quarter results on April 21.
