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Sherwin-Williams (SHW) Declares Preliminary Q4 & FY21 Results

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The Sherwin-Williams Company (SHW - Free Report) recently announced preliminary unaudited sales and earnings results for the fourth quarter and full-year 2021.

The company stated that fourth-quarter consolidated net sales increased roughly 6.1% from the previous year’s levels. The net income per share for the quarter is projected to be roughly $1.15 per share. Adjusted net income is expected to be $1.35 per share.

The full-year 2021 net income per share is forecast to be around $6.96 per share. Adjusted net income is now projected to be $8.15 per share compared with the prior view of $8.35-$8.55.

The company stated that while it has met its consolidated fourth-quarter net sales guidance and demand remains strong, it is disappointed about its weaker-than-expected earnings results in the quarter.

Its lower-than-expected earnings relative to its prior guidance is due to dismal performance in The Americas Group. Sales in the unit were below its outlook due to slower-than-expected improvement in raw material availability and pandemic-related labor headwinds in December. Although the availability of some raw materials has improved modestly, others including select resins and additives remain in tight supply. Logistics and transportation issues have also impacted the supply chain, the company noted.

Demand remains strong across most of the company’s end markets as it enters 2022, though it expects raw material availability and pandemic-related issues to persist through the first quarter. Raw material and other costs remain high, and it continues to respond with pricing actions in every group to offset higher costs, including a 12% price increase in The Americas Group effective Feb 1, 2022.

Sherwin-Williams has continued to invest in its business adding 50 million gallons of incremental architectural capacity that is now online. It also opened 79 paint stores in the United States and Canada during 2021, including 32 in the fourth quarter.

Shares of Sherwin-Williams have gained 27.5% in the past year compared with a 23.5% rise of the industry.

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Zacks Rank & Key Picks

Sherwin-Williams currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Albemarle Corporation (ALB - Free Report) , Commercial Metals Company (CMC - Free Report) and AdvanSix Inc. (ASIX - Free Report) .

Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 51.3% for the current year. The Zacks Consensus Estimate for ALB's earnings for the current year has been revised 5.4% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average being 22.1%. ALB has rallied around 29.7% over a year.

Commercial Metals, flaunting a Zacks Rank #1 at present, has a projected earnings growth rate of 10.5% for the current fiscal year. CMC's consensus estimate for the current fiscal year has been revised 6.6% upward in the past 60 days.

Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing the same once. It delivered a trailing four-quarter earnings surprise of roughly 13.1%, on average. CMC has rallied around 78.1% over a year.

AdvanSix has a projected earnings growth rate of 3.9% for the current year. The Zacks Consensus Estimate for ASIX’s earnings for the current year has been revised 2% upward in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average being 46.9%. ASIX has rallied 109.1% over a year. It currently carries a Zacks Rank #2 (Buy).