DOW JONES NEWSWIRES
Masco Corp.'s (MAS) third-quarter profit slid 15% as lower sales
volume in new-home construction products and services was somewhat
offset by cost cuts.
Shares of the maker of faucets, cabinets and other building
products rose 1.8% to $13.85 in after-hours trading as earnings
topped analysts' expectations. The company also narrowed its 2009
forecast.
The real estate market appears to be in better shape than it was
a year ago, but buyers are responding mostly to incentives and the
pickup in the industry appears to be concentrated in low- and
middle-priced homes, according to the Federal Reserve. On Monday,
Masco said it expects worldwide spending for consumer products to
continue at reduced levels in the near term.
Earlier this month, Credit Suisse said it expected a recovery in
housing over the next several years that would help Masco, which
has seen sales and margins improve alongside housing starts in
prior cycles. Many of Masco's products are installed later in the
construction cycle, the firm said.
Credit Suisse also touted the company's cost-cutting efforts and
product innovation, along with its paint sales and margins, as
areas of strength.
Masco posted earnings of $28 million, or 8 cents a share, down
from $33 million, or 9 cents a share. Earnings from continuing
operations, however, rose to 14 cents from 9 cents.
Revenue dropped 17% to $2.09 billion for Masco, whose product
lines include Kraftmaid kitchen cabinets and Delta faucets.
Analysts surveyed by Thomson Reuters expected earnings of 9
cents on revenue of $2.03 billion.
Gross margin improved to 27.2% from 25.8%, the highest rate the
company has achieved in the last seven quarters.
North American revenue fell 17%, while international sales were
down 13%. International sales would have dropped 7% excluding the
impact of the stronger dollar.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com