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Sherwin-Williams' (SHW) Q2 Earnings & Sales Top Estimates
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The Sherwin-Williams Company (SHW - Free Report) logged net income (as reported) of $4.25 per share for the second quarter of 2018, up around 26.5% from $3.36 per share recorded a year ago.
Adjusted earnings (barring acquisition-related costs and environmental provisions) for the quarter came in at $5.73 per share, topping the Zacks Consensus Estimate of $5.59.
Sherwin-Williams posted record second-quarter revenues of $4,773.8 million, up 27.8% year over year. It beat the Zacks Consensus Estimate of $4,712 million. Sales were driven by the addition of Valspar sales, higher selling prices and increased paint sales volumes in the Americas Group unit.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
The Americas Group unit registered net sales of $2.63 billion in the reported quarter, up around 7.7% 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 surged around 45% to $777.7 million, driven by the addition of Valspar sales and higher pricing, partly masked by reduced volume sales to some of the unit’s retail customers. Valspar sales increased the division’s net sales by around 42.7% in the quarter.
Net sales from the Performance Coatings Group shot up around 79.9% to $1.37 billion in the quarter owing to inclusion of Valspar sales and higher selling prices. Valspar sales contributed roughly 72.9% to the segment’s net sales in the quarter.
Financials and Shareholder Returns
Sherwin-Williams purchased 850,000 shares of its common stock during the first half of 2018. At the end of the quarter, it had remaining authorization to purchase 10.80 million shares through open market purchases.
Outlook
Moving ahead, Sherwin-Williams projects mid-to-high single digit percentage increase in net sales year over year for third-quarter 2018.
For full-year 2018, Sherwin-Williams projects high teens to low twenty percentage increase in net sales from 2017. It also sees incremental sales from the Valspar buyout to be roughly $1.85 billion for the first five months of the year. At this level, the company expects earnings per share for the year to be in the range of $15.00-$15.20 per share. The guidance includes a $3.80-$3.90 per share charge related to the Valspar acquisition. The company also raised its adjusted earnings per share guidance for 2018 to $19.05-$19.35.
Price Performance
Shares of Sherwin-Williams have gained 19.7% over a year, modestly outperforming the 19.3% rise recorded by its industry.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have gained roughly 41% over a year.
Methanex has an expected long-term earnings growth rate of 15%. The company’s shares have rallied around 48% in a year.
BHP Billiton has an expected long-term earnings growth rate of 5.3%. Its shares have shot up roughly 20% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Sherwin-Williams' (SHW) Q2 Earnings & Sales Top Estimates
The Sherwin-Williams Company (SHW - Free Report) logged net income (as reported) of $4.25 per share for the second quarter of 2018, up around 26.5% from $3.36 per share recorded a year ago.
Adjusted earnings (barring acquisition-related costs and environmental provisions) for the quarter came in at $5.73 per share, topping the Zacks Consensus Estimate of $5.59.
Sherwin-Williams posted record second-quarter revenues of $4,773.8 million, up 27.8% year over year. It beat the Zacks Consensus Estimate of $4,712 million. Sales were driven by the addition of Valspar sales, higher selling prices and increased paint sales volumes in the Americas Group unit.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
The Sherwin-Williams Company Price, Consensus and EPS Surprise | The Sherwin-Williams Company Quote
Segment Review
The Americas Group unit registered net sales of $2.63 billion in the reported quarter, up around 7.7% 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 surged around 45% to $777.7 million, driven by the addition of Valspar sales and higher pricing, partly masked by reduced volume sales to some of the unit’s retail customers. Valspar sales increased the division’s net sales by around 42.7% in the quarter.
Net sales from the Performance Coatings Group shot up around 79.9% to $1.37 billion in the quarter owing to inclusion of Valspar sales and higher selling prices. Valspar sales contributed roughly 72.9% to the segment’s net sales in the quarter.
Financials and Shareholder Returns
Sherwin-Williams purchased 850,000 shares of its common stock during the first half of 2018. At the end of the quarter, it had remaining authorization to purchase 10.80 million shares through open market purchases.
Outlook
Moving ahead, Sherwin-Williams projects mid-to-high single digit percentage increase in net sales year over year for third-quarter 2018.
For full-year 2018, Sherwin-Williams projects high teens to low twenty percentage increase in net sales from 2017. It also sees incremental sales from the Valspar buyout to be roughly $1.85 billion for the first five months of the year. At this level, the company expects earnings per share for the year to be in the range of $15.00-$15.20 per share. The guidance includes a $3.80-$3.90 per share charge related to the Valspar acquisition. The company also raised its adjusted earnings per share guidance for 2018 to $19.05-$19.35.
Price Performance
Shares of Sherwin-Williams have gained 19.7% over a year, modestly outperforming the 19.3% rise 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 KMG Chemicals, Inc. , Methanex Corporation (MEOH - Free Report) and BHP Billiton Limited (BHP - Free Report) each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have gained roughly 41% over a year.
Methanex has an expected long-term earnings growth rate of 15%. The company’s shares have rallied around 48% in a year.
BHP Billiton has an expected long-term earnings growth rate of 5.3%. Its shares have shot up roughly 20% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>