Valspar Corp. celebrated Valentine’s Day with sweet success, bouncing back from an end-of-year loss with double-digit gains and a brighter full-year earnings outlook.
The Minneapolis-based paint and coatings company rebounded from a $295 million fourth-quarter loss, reporting increases in sales, net income and earnings Tuesday (Feb. 14) for the first quarter ended Jan. 27.
Photo: Valspar Corp.
|First-quarter sales in Valspar’s coatings segment grew to $494.6 million in 2012, compared to $456.3 million in 2011.|
Valspar is the fifth-largest paint and coating company in North America and the sixth largest in the world.
Its portfolio runs from consumer paint, to coating intermediates, to coil and protective coatings, to packaging and automotive coatings.
First-quarter 2012 sales totaled $885.6 million, a 5.1 percent increase from the first quarter of 2011, the company reported. Adjusted net income per share increased to $0.62 in Q1 of 2012, a 59 percent increase from the prior-year period.
(First-quarter adjusted net income per share excluded a $0.04 per share restructuring charge in 2012 and $0.05 per share in acquisition-related charges in 2011.)
|CEO Gary E. Hendrickson announced that the company was increasing its full-year earnings guidance.|
Net income for the first quarter of 2012 was $55.8 million (up from $33.4 million in Q1 of 2011), and reported earnings per share were $0.58 (compared to $0.34 for the year-ago period).
The coatings segment boomed, with first-quarter sales climbing to $494.6 million in 2012, compared to $456.3 million in 2011. Paint sales edged up to $339.5 million for the quarter, from $335.9 million in the year-ago period.
“We are pleased to report strong earnings for the quarter, which were the result of excellent execution and generally in line with our expectations,” said Gary E. Hendrickson, president and chief executive officer. “We continue to make progress in restoring our operating margins through pricing, productivity and cost management.”
He also said the company had “strengthened our balance sheet by issuing a $400 million bond at attractive rates.”
Buoyed by the first-quarter report and “despite higher interest expense and challenging global markets,” Hendrickson announced that the company would raise its full-year earnings guidance to $2.92-$3.12.
Valspar made a strong showing overall in 2011, with a 22.5 percent increase in sales, its 33rd consecutive dividend increase, and a big leap in adjusted earnings per share.
The good year ended badly, however, with a fourth-quarter loss of nearly $300 million, due to major impairment charges from over-valuation of two housing-related product lines.
When the balance sheet shook out at year’s end, Valspar posted a full-year loss of $138.6 million, or $1.47 per share.