Sherwin-Williams (SHW) has posted a profit of 69 cents per share (before special items) for the fourth quarter of 2009 compared to 60 cents per share (before special items) in the same quarter a year ago. The profit was higher than the Zacks Consensus Estimate of 53 cents per share.
Sherwin-Williams believed the appropriate steps taken by operating segments to control costs and improve efficiencies have led to the improvement in profit. However, the profit declined to $3.82 per share in 2009 from $4.31 per share in 2008.
Consolidated net sales slipped 5.9% to $1.6 billion in the quarter and 11.1% to $7.09 billion in the year due to weak paint sales volume. Currency translation rate changes increased consolidated net sales by 2% in the quarter and decreased consolidated net sales by 1.3% in the year.
Net sales in the Paint Stores Group declined 11.4% in the quarter to $920.2 million and 12.9% in the year to $4.21 billion due to decreased paint volume sales. Net sales from stores open for more than 12 months fell 11.4% in the quarter and 12.9% in the year. Paint Stores Group segment profit increased 5.9% in the quarter while it decreased 7.4% in the year.
Net sales of the Consumer Group segment dipped 2.2% to $240.1 million in the quarter and 3.7% to $1.23 billion in the year. The sales declines were attributable to lower volume sales to most of the Group’s retail customers. Consumer Group segment profit decreased $7.7 million in the quarter while increased 12.2% in the year.
Net sales of the Global Finishes Group rose 5.5% to $437.1 million in the quarter when stated in U.S. dollars due to favorable currency translation rate changes. Meanwhile, net sales decreased 11.4% in the year to $1.65 billion when stated in U.S. dollars due primarily to lower paint sales volume and unfavorable currency translation rate changes that were partially offset by acquisitions and selling price increases. The Global Finishes Group’s segment profit decreased by $16.9 million to a loss of $1.1 million in the quarter while it decreased by 57.3% in the year.
Sherwin-Williams repurchased 4.12 million shares of its common stock through open market purchases in the quarter and 9 million shares in the year. As of December 31, 2009, the company had remaining authorization to purchase 10.75 million shares.
Sherwin-Williams anticipates net income per share in the first quarter of 2010 to lie in the range of 30 cents to 40 cents per share compared to 32 cents per share earned in the first quarter. This is below the Zacks Consensus Estimate of 44 cents per share. For the full year 2010, the company expects net income per share to improve to $4.05 to $4.45 per share from $3.78 per share earned in 2009. This is compatible with the Zacks Consensus Estimate of $4.06.
Due to the improved results, Sherwin-Williams’ stock price has soared 7% to $62.85 from $58.92 after the market closed Monday.
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