Valspar's profit lifted by industrial coatings

Paint, stain and coatings maker Valspar Corp. beat investors' expectations with its latest results, but executives Tuesday hinted at slower growth next year.

The company said its profit jumped 17 percent in the three months ended Oct. 31, the last quarter of its fiscal year.

Sales of industrial coatings, used to cover metals like aluminum and galvanized steel, were strong around the world.

"The coatings segment continued its positive momentum with sales growth of 15 percent and all product lines delivered volume increases in the quarter," Gary Hendrickson, the company's chief executive, said.

The company's profit was $108 million, or $1.28 a share, well above analysts' forecasts of $1.15 a share. Revenue rose 11 percent to $1.2 billion, in line with expectations.

For the new fiscal year, which began Nov. 1, Valspar executives said they expect adjusted profit to grow sharply to between $4.45 to $4.65 a share, well above the $4.01 for the just-completed year.

But they said revenue growth will by a low single-digit percent rate, below the 9.7 percent growth it saw for fiscal 2014.

Hendrickson said the lost business stemmed from the retailer "partly resetting" product lines within their stores. The loss is expected to partly impact Valspar's U.S. paint sales in 2015, but that loss is expected to be offset by rising sales from independent U.S. paint sellers and by improving home improvement markets in China, Australia and Europe, executives said.

Valspar's stock fell 2.2 percent Tuesday.

Over two years, Minneapolis-based Valspar has launched an aggressive growth program with new professional paint products in Lowes stores, new partnerships with Ace Hardware stores, the rollout of Valspar paints into 300 B&Q stores in Britain and the full integration of the Italian-based Inver Group coatings business it bought last year.