Valspar Corp. posted a 19 percent decline in fiscal third-quarter earnings as the paint and coatings maker saw margins slip amid "substantially higher raw material costs" and projected continuing weakness in the U.S. economy.
Chief Executive William Mansfield said strong results from international businesses and pricing helped to partially offset those factors.
The Minneapolis-based company on Monday reported profit of $47 million, or 44 cents a share, down from $58.2 million, or 52 cents a share, a year ago. Earnings excluding items fell to 50 cents from 57 cents.
Revenue for the period ended July 25 rose 7 percent to $957.7 million.
The mean estimates of analysts polled by Thomson Reuters were for per-share earnings of 49 cents on revenue of $921 million.
Gross margin decreased to 28.7 percent from 31.2 percent.
Looking ahead, Valspar reiterated its expectations for 2008 earnings of $1.55 to $1.65 a share. In May, Valspar lowered its forecast by 10 cents due to increased raw material costs and soft U.S. demand.
Valspar is restructuring operations and expects additional charges of 10 cents to 12 cents a share in the current quarter. The effort likely won't affect fiscal 2009 earnings, but it should boost profits by 12 cents to 14 cents a share beginning in fiscal 2010.
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