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Masco Corporation’s (MAS - Free Report) fourth-quarter 2017 adjusted earnings per share of 44 cents surpassed the Zacks Consensus Estimate of 43 cents by 2.3%. Adjusted earnings increased 33% year over year.
Net sales of $1.87 billion beat analysts’ expectation of $1.83 billion by about 2.2%. Sales also grew 7% year over year on the back of strong sales of Plumbing and Decorative Architectural Products.
North American sales increased 5.8% year over year to $1.5 billion and international sales were up 9.5% to $405 million.
Margins
Adjusted gross profit grew 6.9% to $617 million, while adjusted gross margin improved 10 basis points (bps) to 32.9%.
Adjusted operating profit increased 19.9% to $265 million. Adjusted operating margin rose 150 bps to 14.1%.
As a percentage of net sales, selling, general and administrative expenses (adjusted) were 18.8%, less than 20.2% reported in the prior-year quarter.
Adjusted operating margin increased 70 bps to 16.2% in North America and rose 180 bps to 12.3% in international markets.
Segmental Analysis
Plumbing Products: The segment recorded revenues of $972 million, reflecting an increase of 9%. Excluding the impact of foreign currency translation, revenues increased 6% on growth in North America and internationally.
Adjusted operating margin of 17.5% rose 30 bps year over year.
Decorative Architectural Products: Segmental revenues of $494 million were up 12% on strong volume growth from coatings and builders’ hardware.
Operating margin increased 90 bps to 17.8%.
Cabinets and Related Products: Segmental revenues of $223 million decreased 5% year over year.
Adjusted operating margin was 11.2% in the quarter, compared with 8.1% reported in the year-ago quarter.
Windows and Other Specialty Products: Segmental revenues totaled $185 million, down 3% year over year due to the divestiture of Arrow Fastener. Excluding the impact of the divestiture, net sales increased 6% led by strength in the North American windows business.
Operating margin was 2.7% in the quarter compared with 3.1% a year ago.
Masco Corporation Price, Consensus and EPS Surprise
PulteGroup’s (PHM - Free Report) fourth-quarter 2017 adjusted earnings per share of 85 cents beat the Zacks Consensus Estimate of 84 cents by 1.2%. Also, earnings reflect a 27% jump from the year-ago quarter’s 67 cents.
NVR, Inc. (NVR - Free Report) reported fourth-quarter 2017 adjusted earnings of $43.41 per share, missing the Zacks Consensus Estimate of $48.95 by 11.3%. Without the adjustment, NVR reported earnings of $28.88 per share, down 24% year over year.
Upcoming Release
Louisiana-Pacific (LPX - Free Report) is scheduled to release quarterly numbers on Feb 13. The consensus estimate for fourth-quarter earnings is pegged at 58 cents, reflecting an increase of 152.2% on a year-over-year basis.
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Masco (MAS) Tops Q4 Earnings Estimates, 2018 EPS View Upbeat
Masco Corporation’s (MAS - Free Report) fourth-quarter 2017 adjusted earnings per share of 44 cents surpassed the Zacks Consensus Estimate of 43 cents by 2.3%. Adjusted earnings increased 33% year over year.
Net sales of $1.87 billion beat analysts’ expectation of $1.83 billion by about 2.2%. Sales also grew 7% year over year on the back of strong sales of Plumbing and Decorative Architectural Products.
North American sales increased 5.8% year over year to $1.5 billion and international sales were up 9.5% to $405 million.
Margins
Adjusted gross profit grew 6.9% to $617 million, while adjusted gross margin improved 10 basis points (bps) to 32.9%.
Adjusted operating profit increased 19.9% to $265 million. Adjusted operating margin rose 150 bps to 14.1%.
As a percentage of net sales, selling, general and administrative expenses (adjusted) were 18.8%, less than 20.2% reported in the prior-year quarter.
Adjusted operating margin increased 70 bps to 16.2% in North America and rose 180 bps to 12.3% in international markets.
Segmental Analysis
Plumbing Products: The segment recorded revenues of $972 million, reflecting an increase of 9%. Excluding the impact of foreign currency translation, revenues increased 6% on growth in North America and internationally.
Adjusted operating margin of 17.5% rose 30 bps year over year.
Decorative Architectural Products: Segmental revenues of $494 million were up 12% on strong volume growth from coatings and builders’ hardware.
Operating margin increased 90 bps to 17.8%.
Cabinets and Related Products: Segmental revenues of $223 million decreased 5% year over year.
Adjusted operating margin was 11.2% in the quarter, compared with 8.1% reported in the year-ago quarter.
Windows and Other Specialty Products: Segmental revenues totaled $185 million, down 3% year over year due to the divestiture of Arrow Fastener. Excluding the impact of the divestiture, net sales increased 6% led by strength in the North American windows business.
Operating margin was 2.7% in the quarter compared with 3.1% a year ago.
Masco Corporation Price, Consensus and EPS Surprise
Masco Corporation Price, Consensus and EPS Surprise | Masco Corporation Quote
2017 Highlights
Masco’s adjusted earnings per share of $1.94 in 2017 increased 28% year over year. Net sales climbed 4% to $7.6 billion.
Adjusted operating profit margin expanded 70 bps to 15.3%.
Financials
Masco ended the quarter with cash and cash investments of $1.2 billion, as of Dec 31, 2017, compared with $990 million as of Dec 31, 2016.
Guidance
For 2018, the company expects adjusted earnings per share of $2.48 to $2.63.
Zacks Rank & Peer Releases
Masco carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PulteGroup’s (PHM - Free Report) fourth-quarter 2017 adjusted earnings per share of 85 cents beat the Zacks Consensus Estimate of 84 cents by 1.2%. Also, earnings reflect a 27% jump from the year-ago quarter’s 67 cents.
NVR, Inc. (NVR - Free Report) reported fourth-quarter 2017 adjusted earnings of $43.41 per share, missing the Zacks Consensus Estimate of $48.95 by 11.3%. Without the adjustment, NVR reported earnings of $28.88 per share, down 24% year over year.
Upcoming Release
Louisiana-Pacific (LPX - Free Report) is scheduled to release quarterly numbers on Feb 13. The consensus estimate for fourth-quarter earnings is pegged at 58 cents, reflecting an increase of 152.2% on a year-over-year basis.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>