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Masco (MAS) Revokes 2020 Guidance Amid Coronavirus Pandemic

Zacks Equity Research
·3 mins read

The widespread impact of the novel coronavirus outbreak on the global economy has compelled Masco Corporation MAS to withdraw its previously announced 2020 and 2021 guidance.

Nonetheless, the company believes that it remains well positioned to combat the current pandemic situation with its repositioned portfolio of lower ticket, more resilient products, along with a strong balance sheet and liquidity. Notably, the company has $1 billion under the revolving credit facility.

To mitigate the financial impact of the COVID-19 pandemic, Masco has initiated certain actions to reduce operating expenses and lend protection to employees during the current unprecedented period.

Amid the current scenario, its first and foremost concern is to ensure the safety and well-being of employees and their families. However, this manufacturer of Behr paint, Delta faucets and other building products stated that it is still open and operational in certain locations, where activities have not been prohibited. The company has also been selectively reducing expenses to adjust the cost structure to address the current market conditions.

Masco — which is slated to report first-quarter 2020 results on Apr 29 — has withdrawn its previously issued guidance for 2020. Earlier, the company had expected higher year-over-year adjusted earnings growth for the year, despite input costs woes. Masco had expected its 2020 adjusted earnings guidance in the range of $2.35-$2.55 per share, which indicated 4.4-13.3% year-over-year growth.

Meanwhile, another building product manufacturer, Foundation Building Materials FBM has revoked its 2020 financial guidance in response to the COVID-19 disruption. Additionally, it expects first-quarter revenues in the range of $520-$525 million. The Zacks Consensus Estimate for the same is pegged at $529.1 million for the period.

Share Price Performance

Shares of Masco, which currently carries a Zacks Rank #3 (Hold), have outperformed the industry so far this year. Its strong repair and remodel industry, inorganic efforts, cost-saving initiatives, along with strong housing fundamentals helped Masco — which shares space with Arcosa, Inc. ACA and TopBuild Corp. BLD in the same industry — to gain traction. However, its business has been suffering from lower volume, unfavorable mix and softness in certain markets served. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

 

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Masco Corporation (MAS) : Free Stock Analysis Report
 
TopBuild Corp. (BLD) : Free Stock Analysis Report
 
Foundation Building Materials, Inc. (FBM) : Free Stock Analysis Report
 
Arcosa, Inc. (ACA) : Free Stock Analysis Report
 
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