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Why Is Masco (MAS) Up 3.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for Masco (MAS - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Masco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Masco Corporation reported solid results for first-quarter 2022. The top and the bottom line surpassed the Zacks Consensus Estimate and improved on a year-over-year basis. The upside was mainly backed by solid demand for its products and operational efficiencies.
Masco’s president and CEO Keith Allman, said, “We are off to a strong start in 2022. Demand for our products remains healthy, and we are executing well to offset ongoing inflation while still driving volume growth. With this continued solid demand and our strong first quarter performance, we now anticipate our adjusted earnings per share for 2022 to be in the range of $4.15 to $4.35 per share, increased from our previous expectation of $4.10 to $4.30 per share.”
Inside the Headlines
Masco reported adjusted earnings of 95 cents per share, which topped the consensus mark of 88 cents by 8% and increased 6.7% from the year-ago quarter’s figure of 89 cents.
Net sales of $2.20 billion topped the consensus estimate of $2.08 billion by 5.9% and increased 12% from the prior-year quarter’s figure of $1.97 billion. Net sales increased 14% year over year in local currency, excluding acquisitions and divestitures. Sales in the North American region increased 14% from the prior-year quarter’s figure and 12% internationally in local currency.
Segmental Analysis
Plumbing Products: Sales in the segment rose 9% year over year to $1,359 million. In local currency, the segment’s sales (excluding acquisitions and divestitures) increased 12% year over year. The adjusted operating margin contracted 350 basis points (bps) year over year to 16.8%. Adjusted EBITDA declined 9.7% year over year to $252 million.
Decorative Architectural Products: The segment reported sales of $842 million, up 17% from the prior-year period’s number. Although the adjusted operating margin declined 90 bps to 18.8%, adjusted EBITDA rose 9.2% from the prior-year period’s reading to $166 million.
Margins Performance
Adjusted gross margin contracted 350 bps from the prior-year level to 32.1%. Selling, general and administrative expenses — as a percentage of net sales — improved 110 bps to 15.9% from the year-ago quarter’s figure of 17%.
Adjusted operating margin contracted 240 bps on a year-over-year basis to 16.2%. Adjusted EBITDA also fell 4.6% year over year to $390 million.
Financials
As of Mar 31, 2022, Masco had cash and cash investments of $479 million compared with $926 million recorded at 2021 end. Also, it had $737 million available in revolving credit facility at the first quarter-end.
Long-term debt was $2.946 billion, slightly down from $2.949 billion at 2021-end. Net cash for operating activities was $227 million for first three months of 2022 compared with $89 million in the year-ago period.
2022 Projections Lifted
For 2022, adjusted earnings are now projected in the range of $4.15-$4.35 per share compared with $4.10-$4.30 expected earlier. The projection indicates 12.2-17.6% growth from the 2021 level. The Zacks Consensus Estimate for 2022 earnings is currently pegged at $4.17 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Masco has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Masco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Masco (MAS) Up 3.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Masco (MAS - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Masco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Masco Q1 Earnings & Sales Beat, Ups 2022 EPS Guidance
Masco Corporation reported solid results for first-quarter 2022. The top and the bottom line surpassed the Zacks Consensus Estimate and improved on a year-over-year basis. The upside was mainly backed by solid demand for its products and operational efficiencies.
Masco’s president and CEO Keith Allman, said, “We are off to a strong start in 2022. Demand for our products remains healthy, and we are executing well to offset ongoing inflation while still driving volume growth. With this continued solid demand and our strong first quarter performance, we now anticipate our adjusted earnings per share for 2022 to be in the range of $4.15 to $4.35 per share, increased from our previous expectation of $4.10 to $4.30 per share.”
Inside the Headlines
Masco reported adjusted earnings of 95 cents per share, which topped the consensus mark of 88 cents by 8% and increased 6.7% from the year-ago quarter’s figure of 89 cents.
Net sales of $2.20 billion topped the consensus estimate of $2.08 billion by 5.9% and increased 12% from the prior-year quarter’s figure of $1.97 billion. Net sales increased 14% year over year in local currency, excluding acquisitions and divestitures. Sales in the North American region increased 14% from the prior-year quarter’s figure and 12% internationally in local currency.
Segmental Analysis
Plumbing Products: Sales in the segment rose 9% year over year to $1,359 million. In local currency, the segment’s sales (excluding acquisitions and divestitures) increased 12% year over year. The adjusted operating margin contracted 350 basis points (bps) year over year to 16.8%. Adjusted EBITDA declined 9.7% year over year to $252 million.
Decorative Architectural Products: The segment reported sales of $842 million, up 17% from the prior-year period’s number. Although the adjusted operating margin declined 90 bps to 18.8%, adjusted EBITDA rose 9.2% from the prior-year period’s reading to $166 million.
Margins Performance
Adjusted gross margin contracted 350 bps from the prior-year level to 32.1%. Selling, general and administrative expenses — as a percentage of net sales — improved 110 bps to 15.9% from the year-ago quarter’s figure of 17%.
Adjusted operating margin contracted 240 bps on a year-over-year basis to 16.2%. Adjusted EBITDA also fell 4.6% year over year to $390 million.
Financials
As of Mar 31, 2022, Masco had cash and cash investments of $479 million compared with $926 million recorded at 2021 end. Also, it had $737 million available in revolving credit facility at the first quarter-end.
Long-term debt was $2.946 billion, slightly down from $2.949 billion at 2021-end. Net cash for operating activities was $227 million for first three months of 2022 compared with $89 million in the year-ago period.
2022 Projections Lifted
For 2022, adjusted earnings are now projected in the range of $4.15-$4.35 per share compared with $4.10-$4.30 expected earlier. The projection indicates 12.2-17.6% growth from the 2021 level. The Zacks Consensus Estimate for 2022 earnings is currently pegged at $4.17 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Masco has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Masco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.