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Masco's Q3 Earnings Beat on Pricing and Cost Savings, Stock Rises
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Key Takeaways
Masco's Q3 earnings rose 22.7% to $1.19 per share, beating estimates by 17.8%, while sales grew 2.6%.
Pricing, cost savings and lower tariff costs lifted MAS' adjusted operating margin 160 bps to 17.9%.
Masco raised its 2026 adjusted EPS guidance to $4.65-$4.75, backed by strong operational performance.
Masco Corporation (MAS - Free Report) reported third-quarter 2026 adjusted earnings of $1.19 per share, surpassing the Zacks Consensus Estimate of $1.01 by 17.8%. The bottom line increased 22.7% from 97 cents a year ago. Net sales rose 2.6% year over year to $1.97 billion, beating the consensus mark of $1.93 billion by 1.8%.
Results benefited from pricing actions, cost-saving initiatives and lower year-over-year tariff costs, partially offset by higher commodity and employee-related expenses. Adjusted operating margin expanded 160 basis points (bps) to 17.9%, supported by stronger profitability in Plumbing Products.
MAS stock gained more than 6% during today’s pre-trading hours following the earnings release.
Masco Corporation Price, Consensus and EPS Surprise
Excluding the impacts of the Bristan divestiture and unfavorable currency movements, total sales increased 4%.
North American sales grew 5% in local currency, while international sales declined 5%. Excluding the divestiture, international sales decreased 1%, indicating softer performance outside the company's core North American market.
MAS' Operating Profit Rises on Margin Expansion
Reported gross profit increased 9.8% to $720 million from $656 million in the prior-year quarter. Gross margin improved 240 bps year over year to 36.6%.
On an adjusted basis, gross profit rose 10.1% year over year to $730 million. Adjusted gross margin expanded 250 bps year over year to 37.1%, reflecting improved profitability despite ongoing input-cost pressures.
Adjusted operating profit increased 12.5% to $351 million from $312 million a year ago. Reported operating profit rose 11.6% to $338 million, with the reported operating margin expanding 140 bps year over year to 17.2%.
Selling, general and administrative expenses increased 7.9% to $381 million from $353 million a year ago. On an adjusted basis, these expenses represented 19.2% of sales compared with 18.4% a year ago, indicating continued overhead cost pressure.
Masco's Segments Deliver Mixed Results
Plumbing Products: Segment revenues increased 3.7% year over year to $1.34 billion from $1.29 billion. Excluding divestiture and currency impacts, sales grew 5%. North American sales increased 8% in local currency.
Adjusted operating profit jumped 24.9% to $256 million from $205 million. The adjusted operating margin expanded 320 basis points to 19.1%, benefiting from favorable pricing, cost savings and lower tariff-related expenses. Higher commodity and employee-related costs partially offset these gains.
Decorative Architectural Products: Segment sales remained virtually unchanged at $628 million compared with $627 million a year ago. Professional paint sales increased in the mid-single digits, while do-it-yourself paint sales declined in the low-single digits.
Adjusted operating profit edged down to $126 million from $127 million. The adjusted operating margin contracted 20 basis points to 20.1%, as higher commodity costs and lower volumes largely offset pricing benefits and cost-saving initiatives.
MAS' Cash Flow Strengthens, Capital Returns Continue
Masco returned $322 million to shareholders through dividends and share repurchases during the quarter. In the first nine months of 2026, share repurchases totaled $852 million, while cash dividends amounted to $191 million.
Net cash from operating activities increased 30.5% to $788 million during the first nine months from $604 million a year ago. Capital expenditures totaled $116 million compared with $109 million.
The company also declared a quarterly dividend of 32 cents per share, payable Nov. 23, 2026, to shareholders of record as of Nov. 6.
Masco's Liquidity Position Remains Solid
Cash and cash investments totaled $610 million as of Sept. 30, 2026, compared with $647 million at 2025-end. Including $1 billion in available revolving credit, total liquidity reached $1.61 billion.
Gross debt to EBITDA was 2.1X, while working capital accounted for 18.8% of trailing sales. The company continues to target a gross debt-to-EBITDA ratio below 2.5X as part of its capital allocation strategy.
MAS Raises Its 2026 Earnings Guidance
Masco raised its 2026 adjusted earnings guidance to $4.65-$4.75 per share from the previous range of $4.40-$4.60, citing strong operational performance year to date. Reported earnings are projected to be between $4.51 and $4.61 per share.
The company expects full-year sales to grow in the low-single digits, with Plumbing Products trending toward the higher end of that growth range. Decorative Architectural Products revenues are projected to remain roughly flat.
Management forecasts adjusted operating margins of approximately 20% for Plumbing Products, 19.5% for Decorative Architectural Products and 18%-18.5% companywide.
Despite anticipating challenging near-term demand conditions, Masco remains positive about the long-term fundamentals of the repair and remodeling market. Its 2026 capital allocation plans include approximately $1 billion for share repurchases or acquisitions.
Otis Worldwide Corporation (OTIS - Free Report) reported third-quarter 2026 results, wherein adjusted earnings beat the Zacks Consensus Estimate but remained flat year over year. Net sales also surpassed the consensus mark and increased from the year-ago quarter.
OTIS reaffirmed its full-year net sales outlook of $15.1-$15.3 billion, implying approximately 4.6-6% year-over-year growth and expects organic sales growth in the low to mid-single digits. Otis continues to project adjusted operating profit of approximately $2.4 billion and adjusted earnings of $4.01-$4.05 per share.
Comfort Systems USA, Inc. (FIX - Free Report) delivered impressive third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimate and increasing sharply year over year. The quarterly performance reflected robust demand across technology-related projects, strong execution and continued expansion in construction activity. Backlog reached $17.81 billion, reinforcing management's confidence in sustained growth and profitability.
Comfort Systems also paid dividends of 90 cents per share during the quarter, compared with 50 cents a year ago. Share repurchases totaled $340.9 million, reflecting continued shareholder returns alongside investments in business expansion.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2026 results, with adjusted earnings per share and total revenues beating the Zacks Consensus Estimate and increasing year over year. URI’s adjusted earnings of $15.55 per share topped the Zacks Consensus Estimate of $13.83 by 12.4% and grew 32.9% year over year from $11.70 per share. URI’s total revenues rose 15.7% year over year to $4.89 billion and surpassed the consensus estimate of $4.69 billion by 4.3%.
United Rentals management raised its revenue outlook to $18-$18.2 billion from $17.5-$17.8 billion. Adjusted EBITDA is now projected to be $8.3-$8.4 billion compared with $7.98-$8.13 billion previously.
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Masco's Q3 Earnings Beat on Pricing and Cost Savings, Stock Rises
Key Takeaways
Masco Corporation (MAS - Free Report) reported third-quarter 2026 adjusted earnings of $1.19 per share, surpassing the Zacks Consensus Estimate of $1.01 by 17.8%. The bottom line increased 22.7% from 97 cents a year ago. Net sales rose 2.6% year over year to $1.97 billion, beating the consensus mark of $1.93 billion by 1.8%.
Results benefited from pricing actions, cost-saving initiatives and lower year-over-year tariff costs, partially offset by higher commodity and employee-related expenses. Adjusted operating margin expanded 160 basis points (bps) to 17.9%, supported by stronger profitability in Plumbing Products.
MAS stock gained more than 6% during today’s pre-trading hours following the earnings release.
Masco Corporation Price, Consensus and EPS Surprise
Masco Corporation price-consensus-eps-surprise-chart | Masco Corporation Quote
Masco's Q3 Sales Reflect Regional Divergence
Excluding the impacts of the Bristan divestiture and unfavorable currency movements, total sales increased 4%.
North American sales grew 5% in local currency, while international sales declined 5%. Excluding the divestiture, international sales decreased 1%, indicating softer performance outside the company's core North American market.
MAS' Operating Profit Rises on Margin Expansion
Reported gross profit increased 9.8% to $720 million from $656 million in the prior-year quarter. Gross margin improved 240 bps year over year to 36.6%.
On an adjusted basis, gross profit rose 10.1% year over year to $730 million. Adjusted gross margin expanded 250 bps year over year to 37.1%, reflecting improved profitability despite ongoing input-cost pressures.
Adjusted operating profit increased 12.5% to $351 million from $312 million a year ago. Reported operating profit rose 11.6% to $338 million, with the reported operating margin expanding 140 bps year over year to 17.2%.
Selling, general and administrative expenses increased 7.9% to $381 million from $353 million a year ago. On an adjusted basis, these expenses represented 19.2% of sales compared with 18.4% a year ago, indicating continued overhead cost pressure.
Masco's Segments Deliver Mixed Results
Plumbing Products: Segment revenues increased 3.7% year over year to $1.34 billion from $1.29 billion. Excluding divestiture and currency impacts, sales grew 5%. North American sales increased 8% in local currency.
Adjusted operating profit jumped 24.9% to $256 million from $205 million. The adjusted operating margin expanded 320 basis points to 19.1%, benefiting from favorable pricing, cost savings and lower tariff-related expenses. Higher commodity and employee-related costs partially offset these gains.
Decorative Architectural Products: Segment sales remained virtually unchanged at $628 million compared with $627 million a year ago. Professional paint sales increased in the mid-single digits, while do-it-yourself paint sales declined in the low-single digits.
Adjusted operating profit edged down to $126 million from $127 million. The adjusted operating margin contracted 20 basis points to 20.1%, as higher commodity costs and lower volumes largely offset pricing benefits and cost-saving initiatives.
MAS' Cash Flow Strengthens, Capital Returns Continue
Masco returned $322 million to shareholders through dividends and share repurchases during the quarter. In the first nine months of 2026, share repurchases totaled $852 million, while cash dividends amounted to $191 million.
Net cash from operating activities increased 30.5% to $788 million during the first nine months from $604 million a year ago. Capital expenditures totaled $116 million compared with $109 million.
The company also declared a quarterly dividend of 32 cents per share, payable Nov. 23, 2026, to shareholders of record as of Nov. 6.
Masco's Liquidity Position Remains Solid
Cash and cash investments totaled $610 million as of Sept. 30, 2026, compared with $647 million at 2025-end. Including $1 billion in available revolving credit, total liquidity reached $1.61 billion.
Gross debt to EBITDA was 2.1X, while working capital accounted for 18.8% of trailing sales. The company continues to target a gross debt-to-EBITDA ratio below 2.5X as part of its capital allocation strategy.
MAS Raises Its 2026 Earnings Guidance
Masco raised its 2026 adjusted earnings guidance to $4.65-$4.75 per share from the previous range of $4.40-$4.60, citing strong operational performance year to date. Reported earnings are projected to be between $4.51 and $4.61 per share.
The company expects full-year sales to grow in the low-single digits, with Plumbing Products trending toward the higher end of that growth range. Decorative Architectural Products revenues are projected to remain roughly flat.
Management forecasts adjusted operating margins of approximately 20% for Plumbing Products, 19.5% for Decorative Architectural Products and 18%-18.5% companywide.
Despite anticipating challenging near-term demand conditions, Masco remains positive about the long-term fundamentals of the repair and remodeling market. Its 2026 capital allocation plans include approximately $1 billion for share repurchases or acquisitions.
MAS’ Zacks Rank & Recent Construction Releases
Masco currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Otis Worldwide Corporation (OTIS - Free Report) reported third-quarter 2026 results, wherein adjusted earnings beat the Zacks Consensus Estimate but remained flat year over year. Net sales also surpassed the consensus mark and increased from the year-ago quarter.
OTIS reaffirmed its full-year net sales outlook of $15.1-$15.3 billion, implying approximately 4.6-6% year-over-year growth and expects organic sales growth in the low to mid-single digits. Otis continues to project adjusted operating profit of approximately $2.4 billion and adjusted earnings of $4.01-$4.05 per share.
Comfort Systems USA, Inc. (FIX - Free Report) delivered impressive third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimate and increasing sharply year over year. The quarterly performance reflected robust demand across technology-related projects, strong execution and continued expansion in construction activity. Backlog reached $17.81 billion, reinforcing management's confidence in sustained growth and profitability.
Comfort Systems also paid dividends of 90 cents per share during the quarter, compared with 50 cents a year ago. Share repurchases totaled $340.9 million, reflecting continued shareholder returns alongside investments in business expansion.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2026 results, with adjusted earnings per share and total revenues beating the Zacks Consensus Estimate and increasing year over year. URI’s adjusted earnings of $15.55 per share topped the Zacks Consensus Estimate of $13.83 by 12.4% and grew 32.9% year over year from $11.70 per share. URI’s total revenues rose 15.7% year over year to $4.89 billion and surpassed the consensus estimate of $4.69 billion by 4.3%.
United Rentals management raised its revenue outlook to $18-$18.2 billion from $17.5-$17.8 billion. Adjusted EBITDA is now projected to be $8.3-$8.4 billion compared with $7.98-$8.13 billion previously.