The Sherwin-Williams Company SHW makes and distributes paints, coatings and related products, primarily in the North and South America. The company also has operations in the Caribbean region, Europe and Asia. Its well-known brands include Dutch Boy, Minwax and Krylon.
Sherwin-Williams’ strategy is to grow through acquisitions and internal initiatives such as efficient working capital management and innovation. The company continues to invest in its Paint Stores Group segment to boost market share.
However, Sherwin-Williams' Latin American operation remains exposed to currency headwinds and soft end-market demand. Demand for architectural paint remains weak outside North America due to sluggish market conditions and currency headwinds. The company is also faced with volatility in raw material costs.
Let’s have a quick look at this paint company’s first-quarter 2016 release.
Estimate Trend & Surprise History
Investors should note that the earnings estimate for Sherwin-Williams for the first quarter has been stable over the past month. The company has beaten the Zacks Consensus Estimate in 2 of the trailing 4 quarters with an average beat of around 2.91%.
Earnings
Sherwin-Williams’ earnings for the quarter came in at $1.81 per share. Earnings came ahead of the Zacks Consensus Estimate of $1.63.
Revenues
Sherwin-Williams reported revenues of $2,574 million, up around 5.1% year over year. This exceeded the Zacks Consensus Estimate of $2,478 million.
Key Developments to Note
Sherwin-Williams opened 13 net new locations in the Paint Stores Group in the first quarter.
For the second quarter, the company expects consolidated net sales to increase a low to mid single digit percentage compared to last year's second quarter. It forecasts net income in the second quarter, excluding acquisition costs, to be in the range of $3.95 to $4.15 per share. The company projects costs related to the anticipated acquisition of Valspar to decrease net income per share by about 15 cents per share in the second quarter.
Zacks Rank
Currently, Sherwin-Williams has a Zacks Rank #4 (Sell), but that could change following its earnings report which was just released.
Market Reaction
Sherwin-Williams’ shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.
Check back later for our full write up on Sherwin-Williams’ earnings report!
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SHERWIN WILLIAM (SHW): Free Stock Analysis Report
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