The Sherwin-Williams Company (SHW) has logged earnings (as reported) of $3.46 per share in first-quarter 2020, up 32% from $2.62 in the year-ago quarter.
Barring one-time items, adjusted earnings in the quarter were $4.08 per share, which surpassed the Zacks Consensus Estimate of $4.01.
Sherwin-Williams posted revenues of $4,146.7 million, up 2.6% year over year. Moreover, the figure beat the Zacks Consensus Estimate of $4,088.8 million. The company’s results gained from higher architectural paint sales volume, and increased sales in the packaging and coil divisions throughout all regions, which was partly offset by weaker demand in some end markets outside the United States, unfavorable currency translation, and the impacts of the coronavirus outbreak.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
The Sherwin-Williams Company price-consensus-eps-surprise-chart | The Sherwin-Williams Company Quote
The Americas Group segment registered net sales of $2.31 billion in the first quarter, up 7% year over year. The upside can be attributed to higher architectural paint sales across all end markets in North American stores which were partly offset by unfavorable currency translation.
Net sales in the Consumer Brands Group segment decreased 4.9% to $622.3 million. The decline was mainly caused by weaker sales in the Asia Pacific and the planned exit of the ACE business, which were partly offset by higher sales volume across most of its customersin North America and Europe.
Net sales in the Performance Coatings Group fell 1.1% year over year to $1.22 billion in the reported quarter. The decline was mainly caused by softness in end-market demand in some businesses in the Asia Pacific and Europe, and unfavorable currency translation effect, which were partly offset by higher sales in the packaging and coil divisions across all regions.
Financials and Shareholder Returns
At the end of the quarter, Sherwin-Williams had cash and cash equivalents of $238.5 million, up 152.6% year over year. Long-term debt declined 4.8% year over year to $8,289.2 million.
The company purchased 1,700,000 shares of its common stock in the first quarter, ended Mar 31, 2020. It had remaining authorization to purchase 6.75 million shares through open market purchases.
The company expects the impacts of the coronavirus outbreak to continue through the second quarter. Moreover, it anticipates consolidated net sales for the second quarter to decrease year over year by a low-to-mid-teen percentage.
The company now expects net income per share of $16.46-$18.46 as compared with the previously mentioned $19.91-$20.71 for 2020.
Shares of Sherwin-Williams have gained 11.9% in the past year compared with the industry’s 12.1% rise.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space areEquinox Gold Corp. EQX, Franco-Nevada Corporation FNV and Kinross Gold Corporation KGC.
Equinox Gold currently sports a Zacks Rank #1 (Strong Buy)and has a projected earnings growth rate of 237.9% for 2020. The company’s shares have gained 42.5% in a year.You can see the complete list of today’s Zacks #1 Rank stocks here.
Franco-Nevada has a projected earnings growth rate of 22% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have rallied 89.9% in a year.
Kinross has a projected earnings growth rate of 52.9% for 2020. The company’s shares have surged 117% in a year. It currently has a Zacks Rank #2.
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