Masco Corp., the diversified building materials maker whose top brands include KraftMaid and Merillat cabinets, Delta and Hansgrohe faucets, Behr paint, and Milgard windows, reported late today its operating profit climbed to $119 million in the second quarter from $116 million in the year-earlier period. Excluding rationalization and one-time charges, operating profit hit $170 million, up 16.4%. Sales rose 2% to $2.05 billion.
According to the company’s financial statement, sales of plumbing products accounted for most of the sales growth, rising 8% to $682 million, while its operating profit rose 16.2% from the April-June 2009 period to reach $86 million. In contrast, cabinet sales shrank 5% from 2009′s second quarter to $400 million while its operating loss more than tripled to $37 million from $12 million.
Decorative architectural products, Masco’s second-biggest product group, held steady on sales at $505 million but profit slipped to $109 million from $116 million. Sales of installation and other services slipped 1% to $309 million while the operating loss shrank by one-third to $23 million from $34 million. Other specialty products recorded a 4% gain in sales to $152 million and rose half again in operating profit to $11 million from a year-earlier $7 million.
The segment results reflect sales and profit from operations around the world. Taylor, Mich.-based Masco said both North American and International (principally Europe) sales grew 2% in the second quarter from the year before, but it didn’t break down segment sales or profit by region.
“After a relatively slow start to the year, we were encouraged that March and April 2010 sales were up high single digits compared to 2009,” CEO Tim Wadhams said in a statement. “Since then, economic activity related to our markets, particularly consumer spending and new home building has slowed and our business has slowed.
“Although we continue to be concerned about foreclosure activity and access to financing, we believe that housing starts will improve in 2010 from 554,000 units in 2009, but currently believe that the increase will be in a range of 575,000 to 625,000 units,” Wadhams continued. “This is a reduction of our previous expectation that 2010 housing starts would increase to a range of 600,000 to 700,000 units. In addition, we anticipate that expenditures on repair and remodel activity will be challenged in the second half of 2010 and expect that big-ticket items will continue to be deferred, in the short-term, until general economic conditions, unemployment, consumer confidence, credit availability and home prices improve.”
This article originally posted on ProSales Online.
