valspar051308
Soft demand hits Valspar's profit and its outlook
The Minneapolis paintmaker said today that it's being hurt by higher costs for raw materials and softening demand because of the economy.
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Valspar Corp., the Minneapolis-based paintmaker, said Monday that second-quarter earnings declined 1.6 percent from a year ago, falling just short of analyst estimates. The company also cut its full-year earnings outlook, citing higher costs and soft demand.
In the quarter ended April 25, Valspar earned $40.8 million, or 38 cents a share, compared with $41.5 million, or 35 cents a share, a year ago. Revenue was up 3.5 percent, to $836.4 million.
Excluding a non-cash expense related to Valspar's minority shares in Huarun Paints, Valspar earned 41 cents a share in the quarter, compared with 40 cents a share a year ago. Analysts had expected 42 cents a share, according to Thomson First Call. Revenue also fell short of the consensus analyst expectation of $865.6 million.
For the full fiscal year, Valspar said it now expects adjusted net income per share of $1.55 to $1.65, down from the company's previous estimate of $1.65 to $1.75.
"Raw material costs have increased beyond our prior expectations, and we anticipate demand in the U.S. to remain soft for the rest of the year," Valspar CEO William Mansfield said in a prepared statement. "We are responding with additional pricing actions, and remain focused on aggressively reducing costs, gaining new business and investing in our long-term growth opportunities."
In trading Monday, Valspar shares opened lower, then recovered to close at $21.88, up 1 cent.
STAFF REPORT
2nd quarter FY2008, 4/25
2008 2007 % chg. Revenue $836.4 $808.5 +3.5 Income 40.8 41.5 -1.6 Net/cm 37.9 36.4 +4.1 Earn/share 0.38 0.35 +8.66 months
Revenue $1,601.5 $1,503.0 +6.6 Income 64.9 65.1 -0.4 Net/cm 59.0 55.0 +7.4 Earn/share 0.59 0.53 +11.3Figures in millions except for earnings per share.
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