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Sherwin-Williams (SHW) Q3 Earnings & Revenues Top Estimates
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The Sherwin-Williams Company (SHW - Free Report) logged earnings (as reported) of $2.62 per share in third-quarter 2022, up around 39% from $1.88 in the year-ago quarter.
Barring one-time items, adjusted earnings in the reported quarter were $2.83 per share, which topped the Zacks Consensus Estimate of $2.60.
Sherwin-Williams posted revenues of $6,047.4 million, up 17.5% year over year. The figure surpassed the Zacks Consensus Estimate of $5,807.4 million. The upside was driven by higher selling prices in all segments and increased architectural sales volumes in the Americas Group segment. These were partly masked by lower volumes in the Consumer Brands unit. The company witnessed strong demand in the third quarter across all professional architectural markets in the Americas Group.
The SherwinWilliams Company Price, Consensus and EPS Surprise
The Americas Group segment registered net sales of $3,602.7 million in the reported quarter, up around 21% year over year. The upside was mainly owing to higher selling prices and increased architectural sales volume in all markets.
Net sales in the Consumer Brands Group segment rose 8.5% year over year to $701.9 million. Higher selling prices in all regions were partly offset by reduced sales volume mainly outside of North America. The segment faced headwinds in Europe and Asia.
Net sales in the Performance Coatings Group rose roughly 14% year over year to $1,741.7 million in the reported quarter. The upside was mainly driven by higher selling prices and acquisitions. These were partly offset by reduced sales volume outside of North America.
Financials
At the end of the third quarter, Sherwin-Williams had cash and cash equivalents of $130.5 million, down around 58% year over year. Long-term debt increased around 26% year over year to $9,588.9 million.
Sherwin-Williams generated $1.28 billion in net operating cash during the first nine months of 2022. The company also repurchased 2.75 million shares of its common stock during the period.
Outlook
Moving ahead, Sherwin-Williams sees the strong positive results to continue into the fourth quarter. This is projected to be driven by sustained momentum in the Americas Group and industrial end markets in North America, continued price realization, good cost control and softer year-over-year comparisons.
The company expects consolidated net sales to increase high-single to low-double digit percentage year over year in the fourth quarter. For 2022, it is projected to increase by low-double digit percentage.
The company continues to expect adjusted earnings per share for 2022 in the range of $8.50-$8.80.
Price Performance
Shares of Sherwin-Williams have declined 32.7% in the past year compared with 30.1% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Sherwin-Williams currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and Ryerson Holding Corporation (RYI - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 426.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 13% in a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 74% in a year. The company currently carries a Zacks Rank #1.
Ryerson Holding, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 27% over a year.
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Sherwin-Williams (SHW) Q3 Earnings & Revenues Top Estimates
The Sherwin-Williams Company (SHW - Free Report) logged earnings (as reported) of $2.62 per share in third-quarter 2022, up around 39% from $1.88 in the year-ago quarter.
Barring one-time items, adjusted earnings in the reported quarter were $2.83 per share, which topped the Zacks Consensus Estimate of $2.60.
Sherwin-Williams posted revenues of $6,047.4 million, up 17.5% year over year. The figure surpassed the Zacks Consensus Estimate of $5,807.4 million. The upside was driven by higher selling prices in all segments and increased architectural sales volumes in the Americas Group segment. These were partly masked by lower volumes in the Consumer Brands unit. The company witnessed strong demand in the third quarter across all professional architectural markets in the Americas Group.
The SherwinWilliams Company Price, Consensus and EPS Surprise
The SherwinWilliams Company price-consensus-eps-surprise-chart | The SherwinWilliams Company Quote
Segment Review
The Americas Group segment registered net sales of $3,602.7 million in the reported quarter, up around 21% year over year. The upside was mainly owing to higher selling prices and increased architectural sales volume in all markets.
Net sales in the Consumer Brands Group segment rose 8.5% year over year to $701.9 million. Higher selling prices in all regions were partly offset by reduced sales volume mainly outside of North America. The segment faced headwinds in Europe and Asia.
Net sales in the Performance Coatings Group rose roughly 14% year over year to $1,741.7 million in the reported quarter. The upside was mainly driven by higher selling prices and acquisitions. These were partly offset by reduced sales volume outside of North America.
Financials
At the end of the third quarter, Sherwin-Williams had cash and cash equivalents of $130.5 million, down around 58% year over year. Long-term debt increased around 26% year over year to $9,588.9 million.
Sherwin-Williams generated $1.28 billion in net operating cash during the first nine months of 2022. The company also repurchased 2.75 million shares of its common stock during the period.
Outlook
Moving ahead, Sherwin-Williams sees the strong positive results to continue into the fourth quarter. This is projected to be driven by sustained momentum in the Americas Group and industrial end markets in North America, continued price realization, good cost control and softer year-over-year comparisons.
The company expects consolidated net sales to increase high-single to low-double digit percentage year over year in the fourth quarter. For 2022, it is projected to increase by low-double digit percentage.
The company continues to expect adjusted earnings per share for 2022 in the range of $8.50-$8.80.
Price Performance
Shares of Sherwin-Williams have declined 32.7% in the past year compared with 30.1% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Sherwin-Williams currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and Ryerson Holding Corporation (RYI - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 426.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 13% in a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 74% in a year. The company currently carries a Zacks Rank #1.
Ryerson Holding, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 27% over a year.