Masco shares up on strong 4Q report
Masco sees housing market improving and reports strong 4Q, sending shares jumping after hours
TAYLOR, Mich. (AP) -- Masco Corp. shares jumped in after-hours trading Monday after the home improvement and building products company said that increased demand in North America helped it beat market expectations for its fourth quarter.
Masco said that sales and operating profits improved in all five of its operating segments, for the first time since the housing downturn. A number of homebuilders and suppliers have reported fourth-quarter gains as the housing market is recovering.
Masco's President and CEO Tim Wadhams said the company expects new home construction to show strong growth in 2013. He sees repair and remodeling business growing modestly, with big-ticket items continuing to lag.
The Taylor, Mich., company posted a loss of $87 million, or 25 cents per share, for the quarter that ended Dec. 31, compared with a loss of $573 million, or $1.65 per share, in the prior quarter. It earned 4 cents per share on an adjusted basis from continuing operations versus a loss of 9 cents per share in the prior year.
Masco's revenue increased to $1.89 billion from $1.74 billion.
The results easily beat expectations of analysts polled by FactSet, who were expecting the company to post a penny-per-share loss on revenue of $1.79 billion.
The company also said Monday that it decided earlier this month that it plans to sell its Danish ready-to-assemble cabinet business as it is not core to its growth strategy. This business unit had sales of approximately $250 million in 2012.
"We believe the actions we have taken over the past several years, including investing in our brands, reducing our cost structure and paying down debt, have strengthened our business," Wadhams said. "We believe these actions have positively positioned us to take advantage of the upturn in the housing cycle."
Shares of the company soared $1.16, nearly 7 percent, to $18.95 in after-hours trading, having closed flat at $17.79 before the report. Shares had traded between $11.01 and $18.82 in the past 52 weeks.
