PaintSquare.com
      | Connect Follow us on Twitter Like us on Facebook
About | Subscribe | Advertise
  

 

Paint and Coatings Industry News

Main News Page


Industrial Coatings Boost Valspar Q3 Performance

Wednesday, August 18, 2010

Comment | More

Strong performance by its industrial coatings segment propelled the Valspar Corp. to an overall 10% sales increase and 22% net income increase in the third quarter, compared to the same period in 2009, the company reported.

Q3 sales totaled $873.9 million, compared to $794.6 million for the same quarter a year earlier, while net income was $75.1 million, up from $65 million for the prior-year period.

Through the first three quarters of the company’s fiscal year, sales totaled $2.349 billion, up from $2.101 billion for the same period a year earlier. Net income for the first nine months of the year was $170.8 million, compared to $110.2 million a year earlier.

Segment Results

Segment data showed strong performance by Valspar’s industrial coatings products, which include coil coatings, composite coatings, electrocoat technologies, extrusion coatings, powder coatings and industrial liquid coatings.

Coatings sales for the quarter ended July 30 were $484.2 million, up from $415.2 million for the prior-year period. Segment earnings before interest and taxes (EBIT) were $80.5 million, compared to $61.6 million a year earlier.

Coatings-segment sales for the first three quarters were $1.318 billion, compared to $1.148 billion for the same period a year earlier. EBIT for the nine-month period was $185.9 million, up from $116.3 million in the prior year.

Paint-segment sales for the quarter ended July 30 were $323.2 million, up from $318.6 million a year earlier. EBIT for the quarter declined to $38.6 million from $48.8 million a year earlier.

Paint-segment sales for the first three quarters were $860.6 million, up from $788.4 million a year earlier. EBIT for the nine-month period rose to $118.6 million from $100.1 million for the prior-year period.

The company managed to post higher earnings “despite the impact of significant raw material inflation,” said chairman and CEO William L. Mansfield.

Analysts React

The softened paint segment performance drew analysts’ attention. Adjusting for certain special items that affect comparability, net income per share for the recent quarter rose to $0.70 from $0.67 in the same quarter a year ago, but missed a $0.71 per share estimate of analysts polled by Thomson Reuters, RTT News reported.

Goldman Sachs downgraded Valspar Corp. (NYSE: VAL) from Buy to Neutral. “Besides the earnings miss, the firm is more cautious on VAL due to the fact that the homebuyer tax credit distorted the Paint volume recovery more than previously thought,” reported StreetInsider.com. “The firm also notes the gap between raw material price growth and VAL pricing gains widened significantly, and management comments on sequential slowing at industrial end markets concern are concerning.”

Citi maintained a Buy on Valspar. "VAL posted a small earnings beat in 3Q vs. our estimates, but the company’s performance was strongly bifurcated,” a Citi analyst said. “Strength in the Coatings segment carried the load as Paints were disappointingly soft.”

However, the analyst noted, “weakness in DIY was not just confined to VAL, as other paint producers reported similar slowing after the expiration of the Federal Homebuyer Tax Credit in the spring. While the weak housing market remains an overhang, we feel that VAL will benefit from DIY taking additional market share from contractors this year."

During the quarter, Valspar also completed the acquisition of metal packaging coatings assets from DIC Corporation, a Japan-based specialty chemical manufacturer. Valspar also sold metal-decorating inks assets to DIC. The transactions included sales and DIC’s manufacturing site in Bangalore, India. Terms were not disclosed.

Mansfield sounded an optimistic note for the company. “The success of our new business efforts drove our double-digit top line growth,” he said. “Looking ahead, our results will continue to benefit from new business and operational discipline.”

The company is forecasting fiscal-year 2010 adjusted net income per share in the range of $2.15 to $2.25, Mansfield said.

More information: www.valspar.com.

   

Tagged categories: Earnings reports; Economy; Finance; Trends; Valspar

Comment Join the Conversation:

Sign in to our community to add your comments.

SSPC: The Society for Protective Coatings
http://www.sspc.org/

Join SSPC and Enhance
Your Career !


Harsco
BLACK BEAUTY® App

Download the free app for BLACK BEAUTY® Abrasives. Explore all the features from the palm of your hand.
Toll Free: 1-888-733-3646


RPB Respiratory
AN INSTANTLY CLEAN VISOR? HOW IS THAT POSSIBLE?

With RPB Safety’s new Nova 3 Cassette Lens System which has been specifically designed to save you time and money! See the benefits for yourself now!


Lignomat USA Ltd.
A dependable Source for Moisture Meters

Lignomat manufactures pin, pinless and in-situ probe meters for concrete and other building materials. Call 800-227-2105 to find the best moisture measuring device for your application.


Sherwin-Williams
Sherwin-Williams Protective & Marine Coatings

With 4,000 distribution points and 3,700+ years of experience, Sherwin-Williams delivers the products, support and expertise you need, right where you need it.


Jessup Manufacturing Company
More Traction for Extreme Marine Conditions

Jessup Safety Track® 3800 Military Grade peel-and-stick non-skid tapes and treads provide extra slip resistance for decks. MIL-PRF-24467C Type XI, Black & Gray.


Thermion Inc
Buy Back Program

We are offering $5,000
credit for your old Model
This drive system is
being discontinued by
the manufacturer.
More information at
thermioninc.com
877.884.3428


Dow Polyurethane Systems
Choose the Right Coat

Dow’s high-performance, protective polyurethane spray elastomer system increases durability for steel and concrete applications.


Atlas Material Testing Technology

Helping You Put Your Products To The Test

• Outdoor Accelerated
Weathering
• Laboratory Testing
Services
• Accelerated Weathering
Instruments

www.atlas-mts.com atlas.info@ametek.com


SAFE Systems, Inc.
Portable Blast &
Recovery Equipment

Trailer or skid mounted blast and recovery equipment. Systems designed for maximum versatility, environmental compliance
and overall cost savings.
Call 1-800-634-7278

 
 
 
Technology Publishing

The Technology Publishing Network

The Journal of Protective Coatings & Linings (JPCL) PaintSquare
Durability + Design Paint BidTracker

 
EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About PaintSquare.com   |   Privacy policy   |   Terms & conditions   |   Site Map   |   Search   |   Contact Us
 

© Copyright 2000-2015, Technology Publishing / PaintSquare, All rights reserved
2100 Wharton Street, Suite 310, Pittsburgh PA 15203-1951; Tel 1-412-431-8300; Fax 1-412-431-5428; E-mail webmaster@paintsquare.com