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Masco Corporation (MAS - Free Report) reported mixed results for first-quarter 2024, wherein earnings surpassed the Zacks Consensus Estimate but net sales lagged the same.
On a year-over-year basis earnings increased despite net sales decline. Strong operational efficiency helped it deliver solid earnings. Masco’s focus on a balanced capital deployment strategy helped it return $212 million to shareholders via dividends and share repurchases.
Shares of Masco lost 2.3% in the pre-market trading session on Apr 24.
Inside the Headlines
Masco reported adjusted earnings per share (EPS) of 93 cents, which beat the consensus mark of 87 cents by 6.9% and increased 8.1% from the year-ago figure of 86 cents.
Masco Corporation Price, Consensus and EPS Surprise
Net sales of $1.93 billion missed the consensus estimate of $1.95 billion and decreased 3% from the prior-year period due to lower volumes, partially offset by Sauna360 acquisition and pricing actions. Net sales fell 4% year over year in local currency and excluding acquisitions.
Sales in the North American region decreased 2% from the prior year. Internationally, sales decreased 5% in local currency.
Segmental Analysis
Plumbing Products: Sales in the segment fell 2% year over year to $1.19 billion. In local currency and excluding acquisitions, net sales declined 4% year over year. North American sales decreased 1% (declined 4% excluding acquisitions) in local currency.
The adjusted operating margin expanded 260 basis points (bps) year over year to 19.1%. Adjusted EBITDA increased to $255 million from $227 million a year ago.
Decorative Architectural Products: The segment reported sales of $734 million, down 3% from the prior-year period. Paints and other coating products sales were relatively flat, while PRO and DIY paint were in-line with the year-ago period.
Adjusted operating margin contracted 60 bps to 17% due to pricing. Adjusted EBITDA also declined to $134 million from the prior-year figure of $141 million.
Margins Performance
Adjusted gross margin improved 210 bps from the prior-year level to 35.7%. Adjusted selling, general and administrative expenses — as a percentage of net sales — were up 130 bps to 19.1% from the year-ago figure of 17.8%.
Adjusted operating margin improved 90 bps on a year-over-year basis to 16.7% due to a favorable price/cost relationship and cost-savings initiatives, partially offset by lower volumes. Adjusted EBITDA increased 3.7% year over year at $360 million.
Financials
As of Mar 31, 2024, Masco had a total liquidity of $1.32 billion versus $1.63 billion at 2023-end. This includes cash and cash investments of $368 million compared with $634 million recorded at 2023-end. Long-term debt was $2.95 billion, flat from 2023-end.
Net cash for operating activities was $94 million for the first quarter versus net cash from operating activities of $33 million in the prior-year period.
During the reported period, the company repurchased 2.1 million shares for $148 million.
2024 Guidance
The company still expects its adjusted EPS in the range of $4.00-$4.25 versus $3.86 in 2023. Net sales are likely to be up/down by low single digits from the 2023 level of $7.97 billion. Net sales in both segments are anticipated to increase/decrease in the low single digits.
Adjusted operating margin for the year is projected to be nearly 17%. It expects an adjusted operating margin of 18.5% in Plumbing and 18% in Decorative Architectural.
PulteGroup Inc. (PHM - Free Report) reported stellar results in first-quarter 2024, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Also, both metrics increased year over year on favorable demand conditions and its balanced operating model, which allows the company to more effectively meet the individual needs of first-time, move-up and active-adult consumers.
D.R. Horton, Inc. (DHI - Free Report) reported second-quarter fiscal 2024 (ended Mar 31, 2024) results, with earnings and revenues surpassing Zacks Consensus Estimate.
On a year-over-year basis, both the top and bottom lines increased. The upside was backed by the supply of new and existing homes as affordable price points remain limited and robust housing demand is supported by favorable demographics amid elevated inflation and mortgage/interest rates.
KB Home (KBH - Free Report) reported better-than-expected results in first-quarter fiscal 2024 (ended Feb 29, 2024). Both earnings and revenues beat the Zacks Consensus Estimate and rose on a year-over-year basis.
Looking forward to the second quarter and full-year 2024, KBH foresees enhanced conditions in the housing market and ongoing positive trends in the supply chain. Leveraging the advantages of its Built to Order model, which provides buyers with choices, flexibility and affordability, the company is confident in its ability to effectively navigate potential fluctuations in housing market conditions.
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Masco (MAS) Q1 Earnings Beat Estimates, Margins Rise Y/Y
Masco Corporation (MAS - Free Report) reported mixed results for first-quarter 2024, wherein earnings surpassed the Zacks Consensus Estimate but net sales lagged the same.
On a year-over-year basis earnings increased despite net sales decline. Strong operational efficiency helped it deliver solid earnings. Masco’s focus on a balanced capital deployment strategy helped it return $212 million to shareholders via dividends and share repurchases.
Shares of Masco lost 2.3% in the pre-market trading session on Apr 24.
Inside the Headlines
Masco reported adjusted earnings per share (EPS) of 93 cents, which beat the consensus mark of 87 cents by 6.9% and increased 8.1% from the year-ago figure of 86 cents.
Masco Corporation Price, Consensus and EPS Surprise
Masco Corporation price-consensus-eps-surprise-chart | Masco Corporation Quote
Net sales of $1.93 billion missed the consensus estimate of $1.95 billion and decreased 3% from the prior-year period due to lower volumes, partially offset by Sauna360 acquisition and pricing actions. Net sales fell 4% year over year in local currency and excluding acquisitions.
Sales in the North American region decreased 2% from the prior year. Internationally, sales decreased 5% in local currency.
Segmental Analysis
Plumbing Products: Sales in the segment fell 2% year over year to $1.19 billion. In local currency and excluding acquisitions, net sales declined 4% year over year. North American sales decreased 1% (declined 4% excluding acquisitions) in local currency.
The adjusted operating margin expanded 260 basis points (bps) year over year to 19.1%. Adjusted EBITDA increased to $255 million from $227 million a year ago.
Decorative Architectural Products: The segment reported sales of $734 million, down 3% from the prior-year period. Paints and other coating products sales were relatively flat, while PRO and DIY paint were in-line with the year-ago period.
Adjusted operating margin contracted 60 bps to 17% due to pricing. Adjusted EBITDA also declined to $134 million from the prior-year figure of $141 million.
Margins Performance
Adjusted gross margin improved 210 bps from the prior-year level to 35.7%. Adjusted selling, general and administrative expenses — as a percentage of net sales — were up 130 bps to 19.1% from the year-ago figure of 17.8%.
Adjusted operating margin improved 90 bps on a year-over-year basis to 16.7% due to a favorable price/cost relationship and cost-savings initiatives, partially offset by lower volumes. Adjusted EBITDA increased 3.7% year over year at $360 million.
Financials
As of Mar 31, 2024, Masco had a total liquidity of $1.32 billion versus $1.63 billion at 2023-end. This includes cash and cash investments of $368 million compared with $634 million recorded at 2023-end. Long-term debt was $2.95 billion, flat from 2023-end.
Net cash for operating activities was $94 million for the first quarter versus net cash from operating activities of $33 million in the prior-year period.
During the reported period, the company repurchased 2.1 million shares for $148 million.
2024 Guidance
The company still expects its adjusted EPS in the range of $4.00-$4.25 versus $3.86 in 2023. Net sales are likely to be up/down by low single digits from the 2023 level of $7.97 billion. Net sales in both segments are anticipated to increase/decrease in the low single digits.
Adjusted operating margin for the year is projected to be nearly 17%. It expects an adjusted operating margin of 18.5% in Plumbing and 18% in Decorative Architectural.
Zacks Rank
Masco currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Construction Releases
PulteGroup Inc. (PHM - Free Report) reported stellar results in first-quarter 2024, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Also, both metrics increased year over year on favorable demand conditions and its balanced operating model, which allows the company to more effectively meet the individual needs of first-time, move-up and active-adult consumers.
D.R. Horton, Inc. (DHI - Free Report) reported second-quarter fiscal 2024 (ended Mar 31, 2024) results, with earnings and revenues surpassing Zacks Consensus Estimate.
On a year-over-year basis, both the top and bottom lines increased. The upside was backed by the supply of new and existing homes as affordable price points remain limited and robust housing demand is supported by favorable demographics amid elevated inflation and mortgage/interest rates.
KB Home (KBH - Free Report) reported better-than-expected results in first-quarter fiscal 2024 (ended Feb 29, 2024). Both earnings and revenues beat the Zacks Consensus Estimate and rose on a year-over-year basis.
Looking forward to the second quarter and full-year 2024, KBH foresees enhanced conditions in the housing market and ongoing positive trends in the supply chain. Leveraging the advantages of its Built to Order model, which provides buyers with choices, flexibility and affordability, the company is confident in its ability to effectively navigate potential fluctuations in housing market conditions.