19 May 2014 13:50 [Source: ICIS news]
LONDON (ICIS)--Valspar's net income in the second quarter (ended on 25 April) rose 11.8% to $85.96m while sales rose 9.6% to $1.13bn on the back of acquisitions, increased volumes and productivity improvements, the US coatings and paintings producer said on Monday.
On the back of the gains, Valspar said the second quarter’s diluted earnings per share (EPS) had increased to €1.07, up 18% from last year’s second quarter EPS.
Both the Coatings and Paints divisions posted growth in net income and sales. Coatings saw sales increasing 12.3% to $603m, while earnings before interest and taxes (EBIT) rose 22% to $98m. Volumes at this division increased 4% on the back of good performance in packaging and wood coatings, the company said.
However, Valspar said general industrial and coil coatings volumes had declined “mid-single digits” on the back of “uneven end-market demand” and supply chain disruptions due to the severe winter weather in the US.
Paints’ sales rose 7.7% to $472m, as did volumes in the US which increased 10%, but both gains could not offset a fall in EBIT of 4.7% to $50.4m.
The company said the reason for the decrease in EBIT had to be found in increased expenditure in advertising and marketing, as well as higher incentive compensation expenses.
“We are successfully executing our growth plans by integrating acquisitions, scaling new business wins and improving productivity… We remain focused on executing these initiatives to achieve our full year sales and earnings growth objectives,” said Valspar’s CEO Gary Hendrickson.
Valspar said the annual diluted EPS for the fiscal 2014 would stand in between $3.95 and $4.15.
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