Valspar Q2 Profit Rises, Results Beat View; Reiterates 2014 Outlook

(RTTNews) - Paint and coatings maker Valspar Corp. (VAL) on Monday reported a 12 percent increase in profit for the second quarter from last year, as higher revenues more than offset an increase in restructuring charges.

Both revenues and adjusted earnings per share for the quarter beat analysts' expectations. Looking ahead, the company reiterated its earnings outlook for fiscal 2014.

Gary Hendrickson, chairman and chief executive officer of Valspar said, "We are pleased to report another strong quarter of volume and sales growth from both our Coatings and Paints segments. We are successfully executing our growth plans by integrating acquisitions, scaling new business wins and improving productivity."

The Minneapolis, Minnesota-based company's net income for the second quarter was $85.96 million or $0.99 per share, up from $76.91 million or $0.84 per share in the same period last year. The latest quarter's results include after-tax restructuring charges of $6.66 million or $0.08 per share, compared to charges of $6.42 million or $0.07 per share in the year-ago period.

Excluding the restructuring charges, adjusted earnings for the latest quarter were $92.62 million or $1.07 per share, compared to $83.32 million or $0.91 per share in the prior-year period. On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $1.04 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter grew 10 percent to $1.13 billion from $1.03 billion in the same quarter last year. Analysts had a consensus revenue estimate of $1.11 billion for the quarter.

Net sales in the paints segment increased 8 percent to $471.83 million, reflecting volume growth in all geographic regions including the U.S., China and Australia. Coatings segment net sales grew 12 percent to $602.60 million.

Volumes for the quarter also increased 10 percent, driven by strength in the coatings and paints segments.

Excluding acquisitions, volumes in the coatings segment increased 4 percent. Volume growth was led by increases in Packaging coatings and Wood coatings. However, General Industrial and Coil coatings volumes declined mid-single digits in the quarter due to uneven end-market demand and supply chain disruptions caused by inclement weather conditions in the U.S.

Looking ahead to fiscal 2014, Valspar reaffirmed its outlook for adjusted earnings in a range of $3.95 to $4.15 per share. The Street currently expects earnings of $4.07 per share for the year.

VAL closed Friday's trading at $73.33, up $0.05 or 0.07 percent on a volume of 0.90 million shares.