Valspar 4th-Quarter Profit Down 14% as Improved Sales Offset by Restructuring Charges

   By Tess Stynes 
 

Valspar Corp.'s (VAL) fiscal fourth-quarter earnings fell 14% as stronger paint sales were offset by charges for restructuring and other items.

For the recently started fiscal year, the paint-and-coatings company forecast per-share earnings of $3.95 to $4.15 and total sales growth of 7% to 9%. Analysts polled by Thomson Reuters most recently expected per-share profit of $4.12 and revenue growth of 9%.

Chairman and Chief Executive Gary E. Hendrickson in August said that its consumer paint, packaging and wood-product lines continued to see strong volume growth thanks to the company's business initiatives. However, its general industrial markets and some regions abroad continued to face economic pressures from the economy.

On Tuesday, Mr. Henderson stated that in the latest period Valspar "saw the benefit of new business wins in all product lines. These wins were partially offset by weakness in certain end markets and international regions, as has been the case throughout 2013."

Net sales in Valspar's paints segment increased 13% to $449 million, primarily driven by strong growth in the U.S. and new business wins.

Last month rival Sherwin-Williams Co. (SHW) posted better-than-expected third-quarter earnings, also with a boost from stronger paint sales volume at its stores.

For the period ended Oct. 25, Valspar reported a profit of $63.5 million, or 72 cents a share, down from $73.8 million, or 79 cents a share, a year earlier. Excluding restructuring- and acquisition-related charges and other items, adjusted earnings were up at 97 cents from 86 cents. Revenue increased 8.2% to $1.1 billion.

Analysts polled by Thomson Reuters recently expected per-share earnings of 91 cents and revenue of $1.09 billion.

Shares closed Monday at $70.67 and were inactive in recent premarket trading. Through the close, the stock is up 27% from a 52-week low in late November 2012.

Write to Tess Stynes at [e-mail]

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