Masco Corporation’s (MAS - Free Report) fourth-quarter 2017 adjusted earnings per share of 44 cents surpassed the Zacks Consensus Estimate of 43 cents by 2.3%. Adjusted earnings increased 33% year over year.
Net sales of $1.87 billion beat analysts’ expectation of $1.83 billion by about 2.2%. Sales also grew 7% year over year on the back of strong sales of Plumbing and Decorative Architectural Products.
North American sales increased 5.8% year over year to $1.5 billion and international sales were up 9.5% to $405 million.
Adjusted gross profit grew 6.9% to $617 million, while adjusted gross margin improved 10 basis points (bps) to 32.9%.
Adjusted operating profit increased 19.9% to $265 million. Adjusted operating margin rose 150 bps to 14.1%.
As a percentage of net sales, selling, general and administrative expenses (adjusted) were 18.8%, less than 20.2% reported in the prior-year quarter.
Adjusted operating margin increased 70 bps to 16.2% in North America and rose 180 bps to 12.3% in international markets.
Plumbing Products: The segment recorded revenues of $972 million, reflecting an increase of 9%. Excluding the impact of foreign currency translation, revenues increased 6% on growth in North America and internationally.
Adjusted operating margin of 17.5% rose 30 bps year over year.
Decorative Architectural Products: Segmental revenues of $494 million were up 12% on strong volume growth from coatings and builders’ hardware.
Operating margin increased 90 bps to 17.8%.
Cabinets and Related Products: Segmental revenues of $223 million decreased 5% year over year.
Adjusted operating margin was 11.2% in the quarter, compared with 8.1% reported in the year-ago quarter.
Windows and Other Specialty Products: Segmental revenues totaled $185 million, down 3% year over year due to the divestiture of Arrow Fastener. Excluding the impact of the divestiture, net sales increased 6% led by strength in the North American windows business.
Operating margin was 2.7% in the quarter compared with 3.1% a year ago.
Masco Corporation Price, Consensus and EPS Surprise
Masco’s adjusted earnings per share of $1.94 in 2017 increased 28% year over year. Net sales climbed 4% to $7.6 billion.
Adjusted operating profit margin expanded 70 bps to 15.3%.
Masco ended the quarter with cash and cash investments of $1.2 billion, as of Dec 31, 2017, compared with $990 million as of Dec 31, 2016.
For 2018, the company expects adjusted earnings per share of $2.48 to $2.63.
Zacks Rank & Peer Releases
Masco carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PulteGroup’s (PHM - Free Report) fourth-quarter 2017 adjusted earnings per share of 85 cents beat the Zacks Consensus Estimate of 84 cents by 1.2%. Also, earnings reflect a 27% jump from the year-ago quarter’s 67 cents.
NVR, Inc. (NVR - Free Report) reported fourth-quarter 2017 adjusted earnings of $43.41 per share, missing the Zacks Consensus Estimate of $48.95 by 11.3%. Without the adjustment, NVR reported earnings of $28.88 per share, down 24% year over year.
Louisiana-Pacific (LPX - Free Report) is scheduled to release quarterly numbers on Feb 13. The consensus estimate for fourth-quarter earnings is pegged at 58 cents, reflecting an increase of 152.2% on a year-over-year basis.
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