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Sherwin-Williams (SHW) Beats on Q2 Earnings & Sales, Ups View
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The Sherwin-Williams Company (SHW - Free Report) logged second-quarter 2023 earnings (as reported) of $3.07 per share, up around 38.9% from $2.21 in the year-ago quarter.
Barring one-time items, adjusted earnings in the reported quarter were $3.29 per share, which surpassed the Zacks Consensus Estimate of $2.71.
Sherwin-Williams posted revenues of $6,240.6 million, up around 6.3% year over year. The figure surpassed the Zacks Consensus Estimate of $6,016.5 million. The uptick was primarily attributable to higher selling prices, which influenced sales by a mid-single-digit percentage, as well as volume growth in the mid-single digits due to higher architectural sales volume in the Paint Stores Group. This was offset by lower volume in the industrial businesses. Acquisitions contributed 1.4% to the consolidated net sales increase.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
The Paint Stores Group segment registered net sales of $3,498.7 million in the second quarter, up around 10% year over year. The figure surpassed our estimate of $3,340 million. The upside was mainly owing to higher selling prices and volume growth in most end markets.
Net sales in the Consumer Brands Group segment rose 5.1% year over year to $945.8 million, beating our estimate of $874 million. Higher selling prices and volume growth across Latin America and Europe were partly offset by reduced sales volume in North America and Asia.
Net sales in the Performance Coatings Group rose roughly 0.3% year over year to around $1,794.9 million in the reported quarter, beating our estimate of $1,738 million. The upside was mainly driven by selling price increases in all markets and acquisitions, offset by lower volumes in most regions.
Financials
At the end of the second quarter, Sherwin-Williams had cash and cash equivalents of $209.4 million, down 33% year over year. Long-term debt increased around 5.8% year over year to $9,095.7 million.
During the first six months of 2023, the company generated $1.29 billion in net operating cash, a 102% increase over the same period in 2022. During the first six months of 2023, the company returned $848.7 million in cash to its shareholders in the form of dividends and repurchases of 2.3 million shares.
Outlook
SHW has raised its sales and earnings guidance for 2023. The company expects consolidated net sales to be up or down low-single-digit percentage year over year for the third quarter. For 2023, it is projected to be up a low-single-digit percentage.
The company expects earnings per share for 2023 to be in the range of $8.46-$8.86, up from its prior view of $6.79-$7.59. Adjusted earnings are projected to be $9.30-$9.70 per share, up from the prior guidance of $7.95-$8.65.
Price Performance
Shares of Sherwin-Williams have gained 5.4% in the past year compared with 5.5% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Sherwin-Williams currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space include PPG Industries Inc. (PPG - Free Report) , ATI Inc. (ATI - Free Report) and Carpenter Technology Corporation (CRS - Free Report) .
PPG, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 20.8% for the current fiscal year. The Zacks Consensus Estimate for PPG's earnings for the current fiscal year has been revised 1.6% upward in the past 60 days. It delivered an earnings surprise of 7.3% in the trailing four quarters, on average. The company has gained around 14.9% over a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
ATI, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 13.1% for the current year. It earnings beat the Zacks Consensus Estimate in each of the last four quarters. It pulled off a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares are up around 93.4% in a year.
CRS, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 198.11% for the current year. Its earnings beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of roughly 30.9%, on average. CRS shares are up around 95.3% in a year.
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Sherwin-Williams (SHW) Beats on Q2 Earnings & Sales, Ups View
The Sherwin-Williams Company (SHW - Free Report) logged second-quarter 2023 earnings (as reported) of $3.07 per share, up around 38.9% from $2.21 in the year-ago quarter.
Barring one-time items, adjusted earnings in the reported quarter were $3.29 per share, which surpassed the Zacks Consensus Estimate of $2.71.
Sherwin-Williams posted revenues of $6,240.6 million, up around 6.3% year over year. The figure surpassed the Zacks Consensus Estimate of $6,016.5 million. The uptick was primarily attributable to higher selling prices, which influenced sales by a mid-single-digit percentage, as well as volume growth in the mid-single digits due to higher architectural sales volume in the Paint Stores Group. This was offset by lower volume in the industrial businesses. Acquisitions contributed 1.4% to the consolidated net sales increase.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
The Sherwin-Williams Company price-consensus-eps-surprise-chart | The Sherwin-Williams Company Quote
Segmental Review
The Paint Stores Group segment registered net sales of $3,498.7 million in the second quarter, up around 10% year over year. The figure surpassed our estimate of $3,340 million. The upside was mainly owing to higher selling prices and volume growth in most end markets.
Net sales in the Consumer Brands Group segment rose 5.1% year over year to $945.8 million, beating our estimate of $874 million. Higher selling prices and volume growth across Latin America and Europe were partly offset by reduced sales volume in North America and Asia.
Net sales in the Performance Coatings Group rose roughly 0.3% year over year to around $1,794.9 million in the reported quarter, beating our estimate of $1,738 million. The upside was mainly driven by selling price increases in all markets and acquisitions, offset by lower volumes in most regions.
Financials
At the end of the second quarter, Sherwin-Williams had cash and cash equivalents of $209.4 million, down 33% year over year. Long-term debt increased around 5.8% year over year to $9,095.7 million.
During the first six months of 2023, the company generated $1.29 billion in net operating cash, a 102% increase over the same period in 2022. During the first six months of 2023, the company returned $848.7 million in cash to its shareholders in the form of dividends and repurchases of 2.3 million shares.
Outlook
SHW has raised its sales and earnings guidance for 2023. The company expects consolidated net sales to be up or down low-single-digit percentage year over year for the third quarter. For 2023, it is projected to be up a low-single-digit percentage.
The company expects earnings per share for 2023 to be in the range of $8.46-$8.86, up from its prior view of $6.79-$7.59. Adjusted earnings are projected to be $9.30-$9.70 per share, up from the prior guidance of $7.95-$8.65.
Price Performance
Shares of Sherwin-Williams have gained 5.4% in the past year compared with 5.5% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Sherwin-Williams currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space include PPG Industries Inc. (PPG - Free Report) , ATI Inc. (ATI - Free Report) and Carpenter Technology Corporation (CRS - Free Report) .
PPG, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 20.8% for the current fiscal year. The Zacks Consensus Estimate for PPG's earnings for the current fiscal year has been revised 1.6% upward in the past 60 days. It delivered an earnings surprise of 7.3% in the trailing four quarters, on average. The company has gained around 14.9% over a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
ATI, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 13.1% for the current year. It earnings beat the Zacks Consensus Estimate in each of the last four quarters. It pulled off a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares are up around 93.4% in a year.
CRS, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 198.11% for the current year. Its earnings beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of roughly 30.9%, on average. CRS shares are up around 95.3% in a year.