Yahoo Finance Masco (MAS) Q1 Earnings Beat Estimates, Margins Rise Y/Y
Masco Corporation MAS reported mixed results for first-quarter 2024, wherein earnings surpassed the Zacks Consensus Estimate but net sales lagged the same.
On a year-over-year basis earnings increased despite net sales decline. Strong operational efficiency helped it deliver solid earnings. Masco’s focus on a balanced capital deployment strategy helped it return $212 million to shareholders via dividends and share repurchases.
Shares of Masco lost 2.3% in the pre-market trading session on Apr 24.
Inside the Headlines
Masco reported adjusted earnings per share (EPS) of 93 cents, which beat the consensus mark of 87 cents by 6.9% and increased 8.1% from the year-ago figure of 86 cents.
Masco Corporation Price, Consensus and EPS Surprise
Masco Corporation price-consensus-eps-surprise-chart | Masco Corporation Quote
Net sales of $1.93 billion missed the consensus estimate of $1.95 billion and decreased 3% from the prior-year period due to lower volumes, partially offset by Sauna360 acquisition and pricing actions. Net sales fell 4% year over year in local currency and excluding acquisitions.
Sales in the North American region decreased 2% from the prior year. Internationally, sales decreased 5% in local currency.
Segmental Analysis
Plumbing Products: Sales in the segment fell 2% year over year to $1.19 billion. In local currency and excluding acquisitions, net sales declined 4% year over year. North American sales decreased 1% (declined 4% excluding acquisitions) in local currency.
The adjusted operating margin expanded 260 basis points (bps) year over year to 19.1%. Adjusted EBITDA increased to $255 million from $227 million a year ago.
Decorative Architectural Products: The segment reported sales of $734 million, down 3% from the prior-year period. Paints and other coating products sales were relatively flat, while PRO and DIY paint were in-line with the year-ago period.
Adjusted operating margin contracted 60 bps to 17% due to pricing. Adjusted EBITDA also declined to $134 million from the prior-year figure of $141 million.
Margins Performance
Adjusted gross margin improved 210 bps from the prior-year level to 35.7%. Adjusted selling, general and administrative expenses — as a percentage of net sales — were up 130 bps to 19.1% from the year-ago figure of 17.8%.
Adjusted operating margin improved 90 bps on a year-over-year basis to 16.7% due to a favorable price/cost relationship and cost-savings initiatives, partially offset by lower volumes. Adjusted EBITDA increased 3.7% year over year at $360 million.
Financials
As of Mar 31, 2024, Masco had a total liquidity of $1.32 billion versus $1.63 billion at 2023-end. This includes cash and cash investments of $368 million compared with $634 million recorded at 2023-end. Long-term debt was $2.95 billion, flat from 2023-end.
Net cash for operating activities was $94 million for the first quarter versus net cash from operating activities of $33 million in the prior-year period.
During the reported period, the company repurchased 2.1 million shares for $148 million.
2024 Guidance
The company still expects its adjusted EPS in the range of $4.00-$4.25 versus $3.86 in 2023. Net sales are likely to be up/down by low single digits from the 2023 level of $7.97 billion. Net sales in both segments are anticipated to increase/decrease in the low single digits.
Adjusted operating margin for the year is projected to be nearly 17%. It expects an adjusted operating margin of 18.5% in Plumbing and 18% in Decorative Architectural.
Zacks Rank
Masco currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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