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Valspar (VAL - Free Report) delivered a profit of $40.7 million or 50 cents per share for first-quarter fiscal 2017 (ended Jan 27, 2017), down 22% from $52.4 million or 65 cents recorded in the prior-year quarter.
Adjusted earnings came in at 52 cents per share in the fiscal first quarter, missing the Zacks Consensus Estimate of 74 cents.
Revenues improved roughly 2.5% year over year to $907.7 million in the reported quarter. Increased sales in coil, wood and consumer paints product lines more than offset unfavorable foreign currency translation. Sales beat the Zacks Consensus Estimate of $901 million.
Valspar Corporation (The) Price, Consensus and EPS Surprise
Sales from Valspar’s larger Coatings segment grew 4% year over year to $565.2 million in the fiscal first quarter. Foreign currency translation hurt sales by 2.2%, offset by higher sales in coil and wood.
Revenues from the Paints segment inched up 0.1% year over year to $291.3 million in the reported quarter. Currency fluctuations unfavorably impacted sales by 1.3%.
Financials
Valspar ended the first quarter with cash and cash equivalents of around $153.7 million, up 1% year over year. Long-term debt dipped around 9% year over year to roughly $1,543 million.
Proposed Merger
Valspar and Sherwin-Williams (SHW - Free Report) entered into a definitive merger agreement in Mar 2016. Per the deal, Sherwin-Williams will purchase Valspar for roughly $11.3 billion or $113 cash per share. The proposed merger has been approved by Valspar’s shareholders in Jun 2016 in a Special Meeting for shareholders. The planned merger would create a premier global paints and coatings company with strong foothold across Asia-Pacific and Europe, the Middle East and Africa (EMEA) regions.
Price Performance
Valspar has underperformed the Zacks categorized Paints & Allied Products industry over the past three months. The company’s shares have gained around 8% over this period, compared with roughly 10.6% gain recorded by the industry.
Valspar is exposed to currency headwinds which are affecting the company's sales and margins. Moreover, Valspar continues to witness irregular demand trends across its end markets. However, Valspar is gaining from new business wins, expansion and cost management actions. The planned merger with Sherwin-Williams is also expected create significant synergies.
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Valspar's (VAL) Q1 Earnings Miss, Revenues Beat Estimates
Valspar (VAL - Free Report) delivered a profit of $40.7 million or 50 cents per share for first-quarter fiscal 2017 (ended Jan 27, 2017), down 22% from $52.4 million or 65 cents recorded in the prior-year quarter.
Adjusted earnings came in at 52 cents per share in the fiscal first quarter, missing the Zacks Consensus Estimate of 74 cents.
Revenues improved roughly 2.5% year over year to $907.7 million in the reported quarter. Increased sales in coil, wood and consumer paints product lines more than offset unfavorable foreign currency translation. Sales beat the Zacks Consensus Estimate of $901 million.
Valspar Corporation (The) Price, Consensus and EPS Surprise
Valspar Corporation (The) Price, Consensus and EPS Surprise | Valspar Corporation (The) Quote
Segment Highlights
Sales from Valspar’s larger Coatings segment grew 4% year over year to $565.2 million in the fiscal first quarter. Foreign currency translation hurt sales by 2.2%, offset by higher sales in coil and wood.
Revenues from the Paints segment inched up 0.1% year over year to $291.3 million in the reported quarter. Currency fluctuations unfavorably impacted sales by 1.3%.
Financials
Valspar ended the first quarter with cash and cash equivalents of around $153.7 million, up 1% year over year. Long-term debt dipped around 9% year over year to roughly $1,543 million.
Proposed Merger
Valspar and Sherwin-Williams (SHW - Free Report) entered into a definitive merger agreement in Mar 2016. Per the deal, Sherwin-Williams will purchase Valspar for roughly $11.3 billion or $113 cash per share. The proposed merger has been approved by Valspar’s shareholders in Jun 2016 in a Special Meeting for shareholders. The planned merger would create a premier global paints and coatings company with strong foothold across Asia-Pacific and Europe, the Middle East and Africa (EMEA) regions.
Price Performance
Valspar has underperformed the Zacks categorized Paints & Allied Products industry over the past three months. The company’s shares have gained around 8% over this period, compared with roughly 10.6% gain recorded by the industry.
Valspar is exposed to currency headwinds which are affecting the company's sales and margins. Moreover, Valspar continues to witness irregular demand trends across its end markets. However, Valspar is gaining from new business wins, expansion and cost management actions. The planned merger with Sherwin-Williams is also expected create significant synergies.
Zacks Rank & Key Picks
Valspar currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the basic materials space include Univar Inc. and Arkema SA (ARKAY - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Univar has an expected long-term growth of 9.4%.
Arkema has an expected long-term growth of 12.4%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>