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The Sherwin-Williams Company (SHW - Free Report) logged fourth-quarter 2023 earnings (as reported) of $1.39 per share, down around 6.1% from $1.48 in the year-ago quarter.
Barring one-time items, adjusted earnings in the reported quarter were $1.81 per share, which surpassed the Zacks Consensus Estimate of $1.80.
Sherwin-Williams posted revenues of $5,252.2 million, up around 0.4% year over year. The figure surpassed the Zacks Consensus Estimate of $5,209.9 million. Consolidated net sales rose mainly due to an increase in Paint Stores Group's net sales volume. This increase was partly offset by reduced net sales volumes in the Performance Coatings and Consumer Brands Groups.
The Sherwin-Williams Company Price, Consensus and EPS Surprise
The Paint Stores Group segment registered net sales of $2,944.6 million in the fourth quarter, up around 2.3% year over year. The figure surpassed the consensus estimate of $2,931 million. The rise was primarily driven by low-single-digit percentage net sales volume growth in the protection and marine, commercial and residential repaint end markets.
Net sales in the Consumer Brands Group segment declined 7.1% year over year to $692.3 million, beating the Zacks Consensus Estimate of $646 million. The drop was primarily caused by a mid-single-digit percentage decrease in net sales volume owing to difficult demand in North America and the divestment of the China architectural business, which reduced net sales by roughly 3% year over year, offset by growth in Latin America and Europe.
Net sales in the Performance Coatings Group increased roughly 0.4% year over year to $1,614.2 million in the reported quarter, missing the Zacks Consensus Estimate of $1,637 million. This increase was largely due to acquisitions and favorable currency translation, which both improved net sales by a low-single-digit percentage. Industrial Wood, including acquisitions, Coil and Automotive Refinish businesses, drove growth, while Packaging and General Industrial businesses declined.
Financials
The company generated $3.52 billion in net operating cash in 2023. This robust cash generation enabled SHW to return $2.06 billion to shareholders through dividends and share repurchases.
Outlook
The company forecasts its consolidated net sales for the first quarter of 2024 to be up or down a low single-digit percentage year over year and up low to mid-single-digit in full-year 2024. It expects full-year 2024 net income per share to be in the range of $10.05 to $10.55. Full-year 2024 adjusted net income per share is estimated to be in the band of $10.85 to $11.35. The company expects effective tax rate of low 20% for 2024.
Price Performance
Shares of Sherwin-Williams have gained 33.8% in the past year compared with a 33.3% 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 in the basic materials space include The Andersons Inc. (ANDE - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Alpha Metallurgical Resources Inc. (AMR - Free Report) .
Andersons currently carries a Zacks Rank #1 (Strong Buy). ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. The company’s shares have surged 40.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have soared 42% in the past year.
The Zacks Consensus Estimate for AMR’s current-year earnings has been revised upward by 69% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 132.3% in a year.
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Sherwin-Williams (SHW) Beats Q4 Earnings & Sales Estimates
The Sherwin-Williams Company (SHW - Free Report) logged fourth-quarter 2023 earnings (as reported) of $1.39 per share, down around 6.1% from $1.48 in the year-ago quarter.
Barring one-time items, adjusted earnings in the reported quarter were $1.81 per share, which surpassed the Zacks Consensus Estimate of $1.80.
Sherwin-Williams posted revenues of $5,252.2 million, up around 0.4% year over year. The figure surpassed the Zacks Consensus Estimate of $5,209.9 million. Consolidated net sales rose mainly due to an increase in Paint Stores Group's net sales volume. This increase was partly offset by reduced net sales volumes in the Performance Coatings and Consumer Brands Groups.
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 $2,944.6 million in the fourth quarter, up around 2.3% year over year. The figure surpassed the consensus estimate of $2,931 million. The rise was primarily driven by low-single-digit percentage net sales volume growth in the protection and marine, commercial and residential repaint end markets.
Net sales in the Consumer Brands Group segment declined 7.1% year over year to $692.3 million, beating the Zacks Consensus Estimate of $646 million. The drop was primarily caused by a mid-single-digit percentage decrease in net sales volume owing to difficult demand in North America and the divestment of the China architectural business, which reduced net sales by roughly 3% year over year, offset by growth in Latin America and Europe.
Net sales in the Performance Coatings Group increased roughly 0.4% year over year to $1,614.2 million in the reported quarter, missing the Zacks Consensus Estimate of $1,637 million. This increase was largely due to acquisitions and favorable currency translation, which both improved net sales by a low-single-digit percentage. Industrial Wood, including acquisitions, Coil and Automotive Refinish businesses, drove growth, while Packaging and General Industrial businesses declined.
Financials
The company generated $3.52 billion in net operating cash in 2023. This robust cash generation enabled SHW to return $2.06 billion to shareholders through dividends and share repurchases.
Outlook
The company forecasts its consolidated net sales for the first quarter of 2024 to be up or down a low single-digit percentage year over year and up low to mid-single-digit in full-year 2024. It expects full-year 2024 net income per share to be in the range of $10.05 to $10.55. Full-year 2024 adjusted net income per share is estimated to be in the band of $10.85 to $11.35. The company expects effective tax rate of low 20% for 2024.
Price Performance
Shares of Sherwin-Williams have gained 33.8% in the past year compared with a 33.3% 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 in the basic materials space include The Andersons Inc. (ANDE - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Alpha Metallurgical Resources Inc. (AMR - Free Report) .
Andersons currently carries a Zacks Rank #1 (Strong Buy). ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. The company’s shares have surged 40.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have soared 42% in the past year.
The Zacks Consensus Estimate for AMR’s current-year earnings has been revised upward by 69% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 132.3% in a year.