Sherwin-Williams (SHW) Misses Q3 EPS by 10c, Updates Outlook

October 25, 2016 7:04 AM EDT

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Sherwin-Williams (NYSE: SHW) reported Q3 EPS of $4.23, ex-items, $0.10 worse than the analyst estimate of $4.33. Revenue for the quarter came in at $3.28 billion versus the consensus estimate of $3.28 billion.

GUIDANCE:

Sherwin-Williams sees FY2016 EPS of $12.25-$12.35, ex-items, versus the consensus of $12.63.

Commenting on the financial results, John G. Morikis, President and Chief Executive Officer, said, "Revenue growth on a comparable basis slowed sequentially in the third quarter across most of our reportable segments. Despite this slowdown, we remain bullish on future demand across most of our end markets, and we continue to invest in areas that will drive growth and productivity in the quarters and years ahead. In the first nine months, we opened 55 net new store locations in the Paint Stores Group. During the quarter, we increased the dividend rate to $.84 from $.67 last year. Our balance sheet remains flexible and is positioned well for the anticipated Valspar acquisition and other investments in our business.

"Over the balance of the year, the input cost tailwinds are likely to turn to headwinds and the slower pace of sales growth is unlikely to fully offset our investments in new stores, territories and retail programs already in place. For the fourth quarter, we anticipate our core consolidated net sales will increase a low single digit percentage compared to last year's fourth quarter. At that anticipated sales level, we estimate diluted net income per common share in the fourth quarter of 2016 to be in the range of $1.45 to $1.55 per share, compared to $2.12 per share earned in the fourth quarter of 2015. Fourth quarter 2016 earnings per share includes costs related to the anticipated acquisition of Valspar totaling approximately $.71 per share and an increase in EPS of approximately $.03 per share related to the decrease in the income tax provision. For the full year 2016, we expect core consolidated net sales to increase by a low single digit percentage compared to full year 2015. With annual sales at that level, we are updating our guidance for full year 2016 diluted net income per common share to be in the range of $11.30 to $11.40 per share, compared to $11.16 per share earned in 2015. Full year 2016 earnings per share includes costs related to the anticipated acquisition of Valspar totaling approximately $1.35 per share and an increase in EPS of approximately $.40 per share related to the decrease in the income tax provision."

For earnings history and earnings-related data on Sherwin-Williams (SHW) click here.



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