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Higher prices push up Sherwin-Williams 3Q net

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  • Originally published October 25, 2011 at 2:32 p.m., updated October 25, 2011 at 10:40 p.m.

CLEVELAND (AP) - The Sherwin-Williams Co. said Tuesday its net income rose 3 percent, helped by price increases to offset the paint maker and retailer's higher costs.

The Cleveland-based company's earnings and revenue beat expectations. Its stock rose nearly 3 percent in late-day trading.

Consumers cut back on major home renovations during the recession, a trend that has continued post-recession as homeowners grapple with the uncertain economy. But paint sales have remained strong, because painting a room remains a relatively inexpensive home-improvement project.

Still, paint makers are dealing with higher raw material costs. Sherwin-William, whose brands include Dutch Boy, Minwax and its namesake, said price increases in most of its categories helped offset those costs.

Net income rose 3 percent to $179.9 million, or $1.71 per share, from $175.3 million, or $1.60 per share. Analysts expected $1.69 per share, according to FactSet.

Revenue rose 14 percent to $2.48 billion from $2.17 billion last year. Analysts expected $2.42 billion. Revenue in stores open at least a year rose 8.2 percent. The figure is considered a key gauge of a retailer's performance because it excludes stores that open or close during the year.

Sherwin-Williams forecast net income of 67 to 87 cents per share for the fourth quarter, excluding a one-time cost of 72 cents per share related to a settlement it reached with the IRS over federal tax deduction claims related to the company's employee stock ownership plan. Analysts had projected 81 cents per share.

Sherwin-Williams said it expects revenue will rise 6 percent to 10 percent, implying revenue of $2.01 billion to $2.09 billion. Analysts expect $2.02 billion.

For the year, the company continues to expect net income of $4.65 to $4.85, excluding one-time items such as the IRS settlement, with revenue rising in the mid-teen percentage range. Analysts expect earnings of $4.79 per share.

Sherwin-Williams' shares rose $1.57, or 1.9 percent, to $83.15 Tuesday. The stock is nearly flat compared with the beginning of the year.




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