DOW JONES NEWSWIRES 
 

Masco Corp.'s (MAS) third-quarter profit slid 15% as lower sales volume in new-home construction products and services was somewhat offset by cost cuts.

Shares of the maker of faucets, cabinets and other building products rose 1.8% to $13.85 in after-hours trading as earnings topped analysts' expectations. The company also narrowed its 2009 forecast.

The real estate market appears to be in better shape than it was a year ago, but buyers are responding mostly to incentives and the pickup in the industry appears to be concentrated in low- and middle-priced homes, according to the Federal Reserve. On Monday, Masco said it expects worldwide spending for consumer products to continue at reduced levels in the near term.

Earlier this month, Credit Suisse said it expected a recovery in housing over the next several years that would help Masco, which has seen sales and margins improve alongside housing starts in prior cycles. Many of Masco's products are installed later in the construction cycle, the firm said.

Credit Suisse also touted the company's cost-cutting efforts and product innovation, along with its paint sales and margins, as areas of strength.

Masco posted earnings of $28 million, or 8 cents a share, down from $33 million, or 9 cents a share. Earnings from continuing operations, however, rose to 14 cents from 9 cents.

Revenue dropped 17% to $2.09 billion for Masco, whose product lines include Kraftmaid kitchen cabinets and Delta faucets.

Analysts surveyed by Thomson Reuters expected earnings of 9 cents on revenue of $2.03 billion.

Gross margin improved to 27.2% from 25.8%, the highest rate the company has achieved in the last seven quarters.

North American revenue fell 17%, while international sales were down 13%. International sales would have dropped 7% excluding the impact of the stronger dollar.

-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com