Masco Corp. Earnings: Higher Expenses DECREASE Margins

On top of dropping to a loss in the second quarter, S&P 500 (NYSE:SPY) component Masco Corporation (NYSE:MAS) also came in short of analyst estimates. Masco manufactures and installs building and home improvement products including faucets, cabinets, architectural coatings, and windows.

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Masco Corporation Earnings Cheat Sheet

Results: Reported a loss of $75 million (22 cents per diluted share) in the quarter. Masco Corporation had a net income of $8 million or 2 cents per share in the year-earlier quarter.

Revenue: Rose 0.3% to $2 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Masco Corporation fell short of the mean analyst estimate of 11 cents per share. It fell short of the average revenue estimate of $2.08 billion.

Quoting Management: “While general economic activity slowed in the second quarter and our sales were flat compared to last year, our top line benefitted from increased new home construction activity and sales of plumbing products in North America, and from selling price increases. Also, despite the weakening economic environment in Europe, our International sales were flat in local currencies,” said Masco’s CEO, Tim Wadhams. “In addition, our focus on total cost productivity helped drive leverage in our SG&A expenses and, as a result, we saw our operating margin improve slightly. As planned, in mid-July we improved our balance sheet by repaying our $745 million debt maturity, leaving us with approximately $1.2 billion of cash as we head into the second half of the year.”

Key Stats:

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 5 cents versus a mean estimate of 0 cents per share.

The company reported a net loss last quarter after booking a profit the quarter before that. In the fourth quarter of the last fiscal year, the company booked a profit of $573 million, or $1.65 per share.

Looking Forward: The average estimate for the third quarter is steady at 12 cents a share. For the fiscal year, the average estimate has moved up from 22 cents a share to 28 cents over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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