US Sherwin-Williams Q1 2014 net income falls despite higher sales

17 April 2014 13:03 Source:ICIS News

LONDON (ICIS)--Sherwin-Williams' 2014 first-quarter net income fell slightly to $115.5m from $116.2m in the same period last year despite higher sales, partly on higher distribution costs in its Consumer segment, the US-based paints and coatings major said on Thursday.

The group’s diluted net income per common share, however, rose to $1.14 from $1.11 over the same period, due primarily to improved operating results from its Paint Stores and Global Finishes groups.

Net sales increased 9.2% year on year to $2.37bn in the three months ended 31 March mainly because of “higher paint sales volume in our Paint Stores Group and acquisitions”.

Acquisitions raised net sales 4.5% in the quarter, while unfavourable currency translation rate changes decreased them 1.9%, Sherwin-Williams said.

Christopher Connor, chairman and CEO, said: "We are pleased to report record sales and earnings per share from the continued positive sales volume and strong operating results of our Paint Stores Group and the operating margin improvement of our Global Finishes Group.

“The Paint Stores Group architectural volume growth was strong across all end market segments. The Comex acquisition performed better than expected in the quarter. Although the impact of harsh weather on domestic sales in the quarter was modest, it did disrupt supply chain operations and service driving up costs in the Consumer Group,” he added.

Connor also said Sherwin-Williams' Global Finishes Group continues to improve its operating margins through better operating efficiencies.

"For the second quarter, we anticipate our consolidated net sales will increase 8-14% compared to last year's second quarter. At that anticipated sales level, we estimate diluted net income per common share in the second quarter of 2014 to be in the range of $2.80-3.00 per share compared to $2.46 per share earned in the second quarter of 2013,” Connor said.

“For the full year 2014, we expect consolidated net sales to increase 8-13% compared to full year 2013. With annual sales at that level, we are reaffirming our guidance that diluted net income per common share for 2014 is expected to be in the range of  $8.12-8.32  per share compared to $7.26 per share earned in 2013,” he added.

By Franco Capaldo