Masco Profits Fall

Masco Corp

Masco Corp. (MAS) announced a decline in profit to $55 million or 16 cents per share (before special items) in the second quarter of the year from $59 million or 17 cents per share (before special items) in the year-ago quarter. However, the company beat the Zacks Consensus Estimate by 3 cents per share during the quarter.

Sales in the quarter jumped about 2% to $2.05 billion. Sales in North America and internationally each rose by 2% compared with the year-ago level. Operating profit (adjusted) increased by $24 million to $170 million from the second quarter of 2009.

Masco's results were positively impacted by improved sales volume of plumbing products, windows and paints and stains, and a favorable product mix of paints and stains. The company also gained from its business rationalizations measures, including business consolidations, plant closures, headcount reductions, system implementations and other cost savings actions. These were partially offset by lower sales volume of cabinets and negative impact of a competitive pricing setting.

Sales in the Cabinets and Related Products segment fell 5% to $400 million; Plumbing Products rose 8% to $682 million; Installation and Other Services decreased 1% to $309 million; Decorative Architectural Products were flat at $505 million; and Other Specialty Products rose 4% to $152 million.

Masco had a cash balance of $1.38 billion as of June 30, 2010, a marginal decline from $1.41 billion as of December 31, 2009. The company's total debt amounted to $4.1 billion as of the above period. The debt-to-capitalization ratio was 61%, up from 58% as of December 31, 2009.

The company has reduced its guidance for 2010. Masco now expects housing starts in 2010 to increase to a range of 575,000 to 625,000 units rather than to 600,000 to 700,000 units, expected earlier, from 554,000 units in 2009.

Masco Corporation is headquartered in Taylor, Michigan. It manufactures, sells and installs home improvement and building products. About 78% of the company's sales are generated by operations in North America. International operations are located principally in Belgium, China, Denmark, Germany, the Netherlands and the U.K.

Masco Profits Fall

By: Abhishek

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