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Sherwin-Williams (SHW) Q2 Earnings & Sales Miss Estimates
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The Sherwin-Williams Company (SHW - Free Report) makes and distributes paints, coatings and related products, primarily in the North and South America. The company also has operations in the Caribbean region, Europe and Asia. Its well-known brands include Dutch Boy, Minwax and Krylon.
Sherwin-Williams’ strategy is to grow through acquisitions and internal initiatives such as efficient working capital management and innovation. Sherwin-Williams has agreed to buy rival paints maker Valspar for roughly $11.3 billion. The acquisition will allow Sherwin-Williams to strengthen its position as a leading paints and coatings provider globally, leveraging highly complementary offerings, strong brands and technologies. Sherwin-Williams also continues to invest in its Paint Stores Group segment to boost market share.
However, Sherwin-Williams' Latin American operation remains exposed to currency headwinds and soft end-market demand. The company is also faced with volatility in raw material costs.
Let’s have a quick look at this paint company’s second-quarter 2016 release.
Estimate Trend & Surprise History
Investors should note that the earnings estimate for Sherwin-Williams for the second quarter have declined by a penny over the past month. The company has beaten the Zacks Consensus Estimate in 3 of the trailing 4 quarters with an average beat of around 5.84%.
Sherwin-Williams’ adjusted earnings for the quarter came in at $4.06 per share. Earnings missed the Zacks Consensus Estimate of $4.17.
Revenues
Sherwin-Williams reported revenues of $3,219.5 million, up around 2.8% year over year. That missed the Zacks Consensus Estimate of $3,276 million.
Key Developments to Note
Sherwin-Williams expects net income per share in the third quarter of 2016 to be in the range of $4.10 to $4.30 per share. Third-quarter earnings per share includes costs related to the planned acquisition of Valspar of around 20 cents per share and an increase in earnings per share of about 10 cents related to the decrease in the income tax provision.
For 2016, the company expects consolidated net sales to increase by a low single digit percentage compared with 2015. The company raised its earnings per share guidance for 2016 to the range of $11.65 to $11.85 per share, compared to $11.16 per share earned in 2015.
Zacks Rank
Currently, Sherwin-Williams has a Zacks Rank #3 (Hold), but that could change following its earnings report which was just released.
Market Reaction
Sherwin-Williams’ shares fell around 3.2% in the pre-market trading following the release. It would be interesting to see how the market reacts to the results during the trading session today.
Check back later for our full write up on Sherwin-Williams’ earnings report!
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Sherwin-Williams (SHW) Q2 Earnings & Sales Miss Estimates
The Sherwin-Williams Company (SHW - Free Report) makes and distributes paints, coatings and related products, primarily in the North and South America. The company also has operations in the Caribbean region, Europe and Asia. Its well-known brands include Dutch Boy, Minwax and Krylon.
Sherwin-Williams’ strategy is to grow through acquisitions and internal initiatives such as efficient working capital management and innovation. Sherwin-Williams has agreed to buy rival paints maker Valspar for roughly $11.3 billion. The acquisition will allow Sherwin-Williams to strengthen its position as a leading paints and coatings provider globally, leveraging highly complementary offerings, strong brands and technologies. Sherwin-Williams also continues to invest in its Paint Stores Group segment to boost market share.
However, Sherwin-Williams' Latin American operation remains exposed to currency headwinds and soft end-market demand. The company is also faced with volatility in raw material costs.
Let’s have a quick look at this paint company’s second-quarter 2016 release.
Estimate Trend & Surprise History
Investors should note that the earnings estimate for Sherwin-Williams for the second quarter have declined by a penny over the past month. The company has beaten the Zacks Consensus Estimate in 3 of the trailing 4 quarters with an average beat of around 5.84%.
SHERWIN WILLIAM Price and EPS Surprise
SHERWIN WILLIAM Price and EPS Surprise | SHERWIN WILLIAM Quote
Earnings
Sherwin-Williams’ adjusted earnings for the quarter came in at $4.06 per share. Earnings missed the Zacks Consensus Estimate of $4.17.
Revenues
Sherwin-Williams reported revenues of $3,219.5 million, up around 2.8% year over year. That missed the Zacks Consensus Estimate of $3,276 million.
Key Developments to Note
Sherwin-Williams expects net income per share in the third quarter of 2016 to be in the range of $4.10 to $4.30 per share. Third-quarter earnings per share includes costs related to the planned acquisition of Valspar of around 20 cents per share and an increase in earnings per share of about 10 cents related to the decrease in the income tax provision.
For 2016, the company expects consolidated net sales to increase by a low single digit percentage compared with 2015. The company raised its earnings per share guidance for 2016 to the range of $11.65 to $11.85 per share, compared to $11.16 per share earned in 2015.
Zacks Rank
Currently, Sherwin-Williams has a Zacks Rank #3 (Hold), but that could change following its earnings report which was just released.
Market Reaction
Sherwin-Williams’ shares fell around 3.2% in the pre-market trading following the release. It would be interesting to see how the market reacts to the results during the trading session today.
Check back later for our full write up on Sherwin-Williams’ earnings report!
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