Research Desk Line-up: LyondellBasell Industries Post Earnings Coverage
LONDON, UK / ACCESSWIRE / November 3, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on The Sherwin-Williams Co. (NYSE: SHW), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=SHW, following the Company's reporting of its third quarter fiscal 2017 financial results on October 24, 2017. The paint and coatings maker's sales and earnings numbers came in ahead of market estimates. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the Specialty Chemicals industry. Pro-TD has currently selected LyondellBasell Industries N.V. (NYSE: LYB) for due-diligence and potential coverage as the Company announced on October 27, 2017, its financial results for Q3 2017. Register for a free membership today, and be among the early birds that get access to our report on LyondellBasell Industries when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on SHW; also brushing on LYB. With the links below you can directly download the report of your stock of interest free of charge at:
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Earnings Reviewed
For the third quarter ended September 30, 2017, Sherwin-Williams' consolidated net sales surged 37.4% to $4.51 billion compared to $3.28 billion in Q3 2016, primarily due to the addition of Valspar's sales since June 2017 and higher paint sales volume in The Americas and Performance Coatings Groups. Excluding sales from Valspar, net sales from core Sherwin-Williams' operations increased 4.6% in the reported quarter. The Company's net sales exceeded analysts' expectations of $4.39 billion.
For Q3 2017, Sherwin-Williams reported net income of $316.61 million, or $0.33 per diluted share, compared to net income of $386.73 million, or $4.08 per diluted share, in Q3 2016. The Company's reported quarterly earnings per share (EPS) included a $1.42 per share charge from acquisition-related costs, inventory purchase accounting adjustments, and increased amortization of intangibles. Sherwin-Williams' EPS in Q3 2017 was also negatively impacted by approximately $0.27 per share from lost sales, increased raw material costs, and recovery expenses resulting from the natural disasters. Valspar's operations increased EPS by $0.49 in Q3 2017, including a $.39 per share charge from interest expenses on new debt. Sherwin-Williams' EPS in Q3 2016 included a $0.24 per share charge from acquisition-related costs. The Company's earnings, excluding one-time items, came in at $4.75 per share and was ahead of Wall Street's expectations for earnings of $4.70 per share.
Segment Results
During Q3 2017, Sherwin-Williams' net sales in The Americas Group grew 6.5% to $2.54 billion on a y-o-y basis, driven by higher architectural paint sales volume across most end market segments and selling price increases. The segment's Latin America unit's net sales, stated in US dollars, increased 4.9% on a y-o-y basis.
For Q3 2017, The Americas Group's segment profit increased $6.3 million to $525.6 million in the reported quarter due primarily to higher paint sales volume and selling price increases, while segment profit as a percentage of net sales decreased to 20.7% in the reported quarter from 21.8% in the year-ago same period.
During Q3 2017, Sherwin-Williams' net sales for the Consumer Brands Group soared 81.6% to $723.3 million, due to the inclusion of Valspar's sales, partially offset by lower volume sales to some of the Group's retail customers. Valspar's sales increased the Group's net sales by 84.4% in the reported quarter.
For Q3 2017, Consumer Brands Group's segment profit decreased to $70.4 million from $87.2 million in Q3 2016, primarily due to acquisition-related purchase accounting adjustments to inventory and increased amortization costs, and increasing raw material costs. As a percentage of net external sales, the segment profit decreased to 9.7% in the reported quarter from 21.9% in the prior year's same quarter.
During Q3 2017, Sherwin-Williams' Performance Coatings Group's net sales increased 150.8% to $1.24 billion, primarily due to the inclusion of Valspar's sales, higher paint sales volumes, and selling price increases. Valspar's sales contributed 148.7% to the Group's net sales in the reported quarter. For Q3 2017, the segment profit decreased to $59.6 million from $68.0 million in Q3 2016, due primarily to acquisition-related costs. As a percentage of net external sales, the segment profit decreased to 4.8% in the quarter from 13.7% in the last year's comparable period.
Cash Matters
Sherwin-Williams did not make any open market purchases of its common stock in the nine months ended September 30, 2017. The Company's net operating cash increased to a record $1.26 billion in the nine months. At September 30, 2017, Sherwin-Williams had cash on hand of $208 million which the Company expects to utilize to reduce debt and fund operations. In the first nine months, Sherwin-Williams opened 61 net new store locations in The Americas Group.
On October 18, 2017, the Board of Directors of Sherwin-Williams announced a regular quarterly dividend of $0.85 per common share, payable on December 08, 2017, to shareholders of record on November 17, 2017.
Outlook
For Q4 2017, Sherwin-Williams is forecasting core net sales to grow in the range of mid-to-high single digit on a y-o-y basis. Additionally, the Company expects incremental sales from the Valspar acquisition to be approximately $1.0 billion in the upcoming quarter. Sherwin-Williams is estimating diluted net income per common share to be in the band of $1.97 to $2.27 per share in Q4 2017, including a $0.98 per share charge from costs associated with the Valspar acquisition, and an EPS increase of $0.15 to $0.25 per share from Valspar's operations.
For FY17, Sherwin-Williams is projecting core net sales to increase by a mid-single-digit percentage compared to FY16. The Company updated its FY17 guidance for diluted net income per common share to be in the range of $11.20 to $11.50 per share compared to $11.99 per share earned in FY16.
Stock Performance
At the closing bell, on Thursday, November 02, 2017, Sherwin-Williams' stock marginally slipped 0.92%, ending the trading session at $392.11. A total volume of 512.50 thousand shares have exchanged hands. The Company's stock price skyrocketed 17.02% in the last three months, 15.93% in the past six months, and 61.71% in the previous twelve months. Moreover, the stock soared 45.91% since the start of the year. The stock is trading at a PE ratio of 33.24 and has a dividend yield of 0.87%. The stock currently has a market cap of $36.60 billion.
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