Paint and coatings giant Valspar Corp. beat Wall Street expectations despite suffering a fourth-quarter setback as negative currency translations and a shorter quarter than last year affected sales, the company said.
Sales for the quarter fell 9 percent from the year-ago quarter to $1.15 billion, company officials said Tuesday. Profits fell 5 percent to $102 million, or $1.26 a share. Excluding nonrecurring items, profits fell 7 percent to $109 million, or $1.35 per share. On average, analysts were expecting $1.31 a share.
Valspar's stock rose $1.88 on Tuesday to close at $85.37 per share.
The company said earnings for the full fiscal year 2016 would be $4.80 to $5 a share. That estimate anticipates a 20-cent bite from sales because of the strong dollar and "mid single digit" sales growth.
Christopher Muir, equity analyst at S&P Capital IQ, raised his 2016 stock price forecast for Valspar to $92 a share after noting that the company beat his fourth-quarter estimates and that its earnings growth rate exceeded industry peers for three years.
"We expect volumes to rise in fiscal year 2016 and see market share gains outside the United States, but [we also] see currency headwinds continuing to pressure sales growth," Muir said.
For full fiscal year 2015, Valspar's sales fell 5 percent to $4.4 billion and profits were $400 million, or $4.85 a share, the company said. Excluding one-time items, full-year profits were $381 million or $4.62 per share.
Earnings for the year set a record, CEO Gary Hendrickson told analysts during a conference call Tuesday morning.
