Sherwin-Williams' (SHW) Q3 Earnings & Sales Trail Estimates
The Sherwin-Williams Company SHW logged net income (as reported) of $3.72 per share for the third quarter of 2018, up around 11.7% from $3.33 per share recorded a year ago.
Adjusted earnings (barring California litigation expense and acquisition-related costs) for the quarter came in at $5.68 per share, lagging the Zacks Consensus Estimate of $5.71.
Sherwin-Williams posted third-quarter revenues of $4,731.5 million, up roughly 5% year over year. It missed the Zacks Consensus Estimate of $4,779 million. The top-line growth was driven by higher selling prices and increased paint sales volumes in the Americas Group and Consumer Brands Group units.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
The Sherwin-Williams Company Price, Consensus and EPS Surprise | The Sherwin-Williams Company Quote
The Americas Group unit registered net sales of $2.67 billion in the reported quarter, up around 5% on a year over year comparison basis. Revenues were driven by increased architectural paint sales volume across most end markets and higher selling prices.
Net sales of the Consumer Brands Group unit went up around 6.5% to $770.5 million, driven mainly by a new customer program and higher selling prices that more than offset lower volume sales to some of the Group's retail customers.
Net sales from the Performance Coatings Group rose around 4.2% to $1.29 billion in the quarter on the back of higher selling prices and strong demand in most of the company’s North American businesses.
Financials and Shareholder Returns
Sherwin-Williams purchased 925,000 shares of its common stock during the first nine months of 2018. At the end of the quarter, it had remaining authorization to purchase 10.73 million shares through open market purchases.
Sherwin-Williams projects mid-single digit percentage increase in net sales year over year for fourth-quarter 2018.
For full-year 2018, Sherwin-Williams projects high teen percentage increase in net sales from 2017. At this level, the company now expects earnings per share for the year to be in the range of $13.85 to $14.00 per share. The company also narrowed its adjusted earnings per share guidance for 2018 to $19.05 to $19.20.
Shares of Sherwin-Williams are down 1.2% over a year against 1.1% growth recorded by its industry.
Zacks Rank and Stocks to Consider
Sherwin-Williams is a Zacks Rank #3 (Hold) stock.
Better-ranked stocks worth considering in the basic materials space include Methanex Corporation MEOH, KMG Chemicals, Inc. KMG and CF Industries Holdings, Inc. CF, each carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Methanex has an expected long-term earnings growth rate of 15%. The company’s shares have rallied around 27% over a year.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. The company’s shares are up roughly 36% over a year.
CF Industries has an expected long-term earnings growth rate of 6%. The company’s shares have gained around 18% in a year’s time.
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