Valspar's third-quarter net profits fall 19%

11 August 2008 15:19  [Source: ICIS news]

HOUSTON (ICIS news)--US paints producer Valspar has posted third-quarter net profits of $47m (€31.5m), down 19% year on year on rising raw material costs and weaker sales, it said on Monday.

Net sales were $957.7m, up from $893.5m reported for the same time last year, Valspar said.

Cost of sales were $683m, up from $615.0m for the same time last year, it added. 

The company's third-quarter gross margins were 28.7%, down 31.2% year on year,Valspar said.

Pre-tax earnings for the company's coatings segment were $52.1m, down from $58.5m year on year, Valspar said, adding pre-tax earnings for the paints segment were $29.4m, down from $36.1m reported for the same time last year.

US paints producers have struggled with rising costs in raw materials and weaker sales - the result of a multi-year slump in the US housing market.

Valspar would likely continue to feel pressure from raw material costs and weaker US demand, the company said. To help offset higher costs and weaker demand, Valspar was improving its efficiency and lowering its cost structure, it added. 

The company maintained its 2008 adjusted net income guidance of $1.55-1.65/share.

Valspar stock was trading at $23.36 at 13.39 GMT on the New York Stock Exchange, down 1.14%.

($1 = €0.67)

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By: Al Greenwood
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