Masco Corporation (MAS) has reported results for the fourth quarter of 2009.
For the quarter, including non-cash impairment charges for goodwill and other intangible assets, the company reported loss from continuing operations of $173 million or 49 cents per share, compared to a loss of $504 million or $1.44 in the year-ago quarter. This was higher than the Zacks Consensus Estimate of a loss of 3 cents per share.
Quarterly net sales from continuing operations declined 3% to $1.9 billion compared with $2.0 billion for the fourth quarter 2008. North American sales declined 7% and International sales increased 12%. In local currencies, International sales increased 1% compared with the fourth quarter of 2008.
Results for 2009 were adversely affected by lower sales volume of new home construction products and services, as well as a decline in consumer spending for home improvement products in both North American and International markets.
The negative market conditions were partially offset by increased sales volume of paints and stains, market share gains, the improved relationship between selling prices and commodity costs and benefits associated with business rationalizations and other cost saving initiatives.
The company continues to focus on rationalization of its businesses, including business consolidation, plant closure, headcount reduction, system implementation and other initiatives. During 2009 and 2008, it incurred costs and charges of $94 million pre-tax (17 cents per common share, after tax) and $78 million pre-tax (14 cents per common share, after tax), respectively, related to these initiatives.
Although new home construction and big-ticket remodeling activity continue to be depressed, the company’s other product groups experienced relatively solid top-line repair and remodel sales growth in the quarter.
Guidance
The company expects that business conditions in 2010 will improve compared to 2009. It remains concerned about the impact of current unemployment levels, foreclosure activity and access to financing and believes that housing starts will improve in 2010 and will increase to a range of 600,000 to 700,000 units.
However, it believes that big-ticket items will continue to be deferred, in the short-term, until general economic conditions, credit availability and home prices improve.
Beginning with 2010, Masco will no longer provide definitive earnings per common share and cash flow guidance. Instead, it will provide additional segment detail, along with estimates of key financial data.
Headquartered in Taylor, Michigan, Masco Corporation is one of the world’s leading manufacturers of home improvement and building products, as well as a leading provider of services that include the installation of insulation and other building products.
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