Sherwin Williams Earnings Cheat Sheet: Sales Surge 18.5%, Shares Decline

S&P 500 (NYSE:SPY) component Sherwin Williams Co. (NYSE:SHW) reported net income above Wall Street’s expectations for the first quarter. The Sherwin-Williams Company is a manufacturer and distributor of paint, coatings and related products. Its three segments are: Paint Stores Group, Consumer Group and Global Finishes Group. While its professional, industrial, commercial and retail customers are mainly in North and South America, the company also has operations in Europe, Asia and the Caribbean.

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Sherwin Williams Earnings Cheat Sheet for the First Quarter

Results: Net income for Sherwin Williams Co. rose to $68.3 million (63 cents/share) vs. $32.6 million (30 cents/share) YoY. A more than twofold rise from the year earlier quarter.

Revenue: Rose 18.5% to $1.86 billion YoY.

Actual vs. Wall St. Expectations: SHW (NYSE:SHW) beat the mean analyst estimate of 52 cents/share. Estimates ranged from 38 cents per share to 57 cents per share.

Quoting Management: Commenting on the first quarter, Christopher M. Connor, Chairman and Chief Executive Officer, said, “Although domestic demand remains soft, we are encouraged by the improvement in domestic DIY and protective and marine sales in the Paint Stores Group and continued growth in architectural, protective and marine, OEM and automotive finishes sales in the Global Group. Our Consumer Group improved their operating results through disciplined cost management and selling price increases. Our operating segment management teams continue to control costs and implement price increases in an effort to keep pace with rising raw material costs.”

Key Stats: The company has now seen net income rise in four-straight quarters. In the fourth quarter of the last fiscal year, net income rose 11.6%, while the figure climbed slightly in the third quarter of the last fiscal year, and 15% four quarters ago from the year earlier.

Over the last five quarters, revenue has increased 11.4% on average year over year. The biggest increase came in the fourth quarter of the last fiscal year, when revenue rose 18.6% from the year earlier quarter.

Competitors to Watch: PPG Industries Inc. (NYSE:PPG), The Home Depot (NYSE:HD), Lowe’s Companies (NYSE:LOW), The Valspar Corporation (NYSE:VAL), RPM International (NYSE:RPM), Tractor Supply (NASDAQ:TSCO), Toll Brothers (NYSE:TOL), PulteGroup (NYSE:PHM), D.R. Horton (NYSE:DHI), Lennar (NYSE:LEN), KB Home (NYSE:KB) and M.D.C. Holdings (NYSE:MDC).

Today’s Performance: Shares of SHW (NYSE:SHW) are trading at $83.76 as of April 21, 2011 at 03:57 PM ET, down 2.39% from the previous closing price of $85.80.


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