Masco Corporation (MAS) Up As 2nd Quarter Earnings Top Forecast
Shares of Troy, Michigan based Masco Corporation (MAS) rose on Tuesday, against the backdrop of a generally higher day in stocks overall. Masco's stock was up 10.66%, rising $2.47 per share, to close at $25.63, on volume of 12,562,273 shares. Earnings for the second quarter of 2015 exceeded expectations, and year over year earnings increased 36%, despite an unfavorable foreign currency environment. The company also disclosed plans to increase its dividend by the end of the year.
Founded in 1929, Masco Corporation is one of the world's leading manufacturers of branded home improvement and building products. The company manufactures, distributes and installs home improvement and building products. The company also manufactures faucets, cabinets, architectural coatings and windows. It provides broad product offerings in a variety of styles and price points and distributes products through multiple channels, including directly to homebuilders and wholesale and retail channels. The company's stock trades on the NYSE.
On Tuesday, the company reported that its adjusted earnings came in at $0.38 per share, well ahead of the consensus of analysts expectation of $0.33 per share. This represented a 36% increase over over the same quarter a year ago. Meanwhile sales increased by 3% over the year earlier, rising to $1.9 billion for the quarter. The increase is actually 7% however, excluding the negative effects of foreign currency translation. The company's sales in North America increased by 7%, while international sales increased by 5% when measured in local currencies. When priced in US dollars however, the company's international sales were actually down by 10%.
Meanwhile, the company's gross margins increased to 33%, compared with 30.7 in the second quarter of 2014. Operating margins increased to 14.5%, from 12.2% a year ago, while income from continuing operations improved to $0.38 per share, up from $0.28 per share.
Four of Masco's segments - Plumbing Products, Decorative Architectural Products, Cabinets and Related Products and Other Specialty Products - saw increases in net sales, though some were dampened by foreign currency translation.
Masco's Board of Directors also announced that the annual dividend would rise to $0.38 per share, up $0.02 per share from its current level. The increase is scheduled to begin in the fourth quarter of this year. In addition, the company disclosed that 3.8 million company shares were repurchased during the second quarter, but the company's liquidity at the end of the quarter stood at $1.5 billion.
"Continued growth momentum, solid execution, and the timing of paint promotions enabled us to achieve earnings above our expectations for the quarter, said Masco's President and CEO Keith Allman. "Importantly, our Cabinets and Related Products segment accelerated the pace of its turnaround, resulting in better than expected top and bottom line results for that segment. In addition to our strong sales and profit growth, we returned nearly $270 million to shareholders through dividends and share repurchases in the first half of 2015.
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