Valspar Q4 Results Beat View; Hikes Dividend, To Buy Back Shares

(RTTNews) - Paints and coatings maker Valspar Corp. (VAL) on Tuesday reported a 70 percent surge in profit for the fourth quarter from last year, reflecting higher sales and fewer charges. Both adjusted earnings per share and quarterly sales topped analysts' expectations. Looking ahead, the company forecast earnings for fiscal 2015 below Street estimates.

In addition, the company's board of directors approved a new $1.5 billion share repurchase program and increased the quarterly dividend by 15 percent.

Gary Hendrickson, chairman and chief executive officer of Valspar said, "This strong performance was driven by volume growth in the Coatings segment; continuing benefits from our new growth initiatives in Paints; excellent performance from our international regions; benefits from new product introductions; and the positive impact of productivity initiatives."

The Minneapolis, Minnesota-based company reported net income for the fourth quarter of $108.06 million or $1.28 per share, up from $63.51 million or $0.72 per share in the prior-year quarter.

The latest quarter's results include restructuring charges of $0.10 per share, while the prior-year quarter's results included restructuring charges of $0.24 per share and acquisition-related charges of $0.01 per share.

Excluding items, adjusted net income for the latest quarter was $1.38 per share for the quarter, compared to $0.97 per share in the year-ago quarter. On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $1.15 per share for the latest quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 11 percent to $1.23 billion from $1.11 billion in the same quarter last year, and beat analysts' consensus revenue estimate of $1.19 billion.

Coatings net sales for the quarter increased 15 percent from the year-ago period to $693.55 million. Excluding acquisitions, sales grew 11 percent and volumes increased in high-single digits.

Net sales for paints grew 7 percent to $479.17 million, with volumes increasing in the high-single digits.

For fiscal 2014, Valspar's net income rose to $345.40 million or $4.01 per share from $289.26 million or $3.20 per share in the previous year. Adjusted earnings for the year were $4.35 per share, compared to $3.54 per share in the prior year.

Net sales for the year increased 10 percent to $4.52 billion from $4.10 billion last year.

Street expected the company to earn $4.12 per share for the year on revenues of $4.48 billion.

Looking ahead to fiscal 2015, Valspar forecasts adjusted earnings in a range of $4.45 to $4.65 per share, on sales growth in the low single-digits. Analysts are looking for earnings of $4.76 per share for the year on revenues of $4.73 billion.

Valspar's board approved a new share repurchase program, authorizing the company to purchase up to $1.5 billion of the company's outstanding shares of common stock. The board also approved a 15 percent dividend increase, declaring a quarterly dividend of $0.30 per share on the company's common stock.

The company noted that the buyback authorization, which has no expiration date, is effective immediately and replaces the previous repurchase authorization of December 2012. Under the prior repurchase authorization of December 2012, Valspar repurchased 10.2 million shares at a cost of $706 million.

The quarterly dividend is payable on December 19, 2014 to shareholders of record on December 8, 2014.

VAL is trading at $86.02, up $1.13 or 1.33 percent on a volume of 23,511 shares.