Masco Stock Gains After Q3 Earnings Beat; Trims FY21 Adjusted EPS Outlook
- Masco Corp (NYSE: MAS) reported third-quarter FY21 sales growth of 11% year-over-year to $2.2 billion, beating the consensus of $2.1 billion. Net sales increased 9% in local currency and excluding acquisitions and divestitures.
- Plumbing Products sales were $1.33 billion (+16% Y/Y), an operating margin of 18.7% vs. 23.8% in 3Q20.
- Decorative Architectural Products sales were $875 million (+4% Y/Y), and an operating margin of 19% vs. 21.3% in 3Q20.
- Adjusted EPS decreased to $0.99 compared to $1.06 in 3Q20, beating the consensus of $0.89.
- The gross margin contracted by 370 bps to 34.2%.
- The operating income decreased by 9.4% Y/Y to $385 million, and the margin contracted by 390 bps to 17.5%.
- Masco generated cash from operating activities year-to-date of $595 million, compared to $573 million a year ago.
- Adjusted EBITDA decreased by 8.1% Y/Y to $421 million, and margin contracted by 400 bps to 19.1%.
- The company's liquidity as of September 30, 2021, stood at $1.185 billion. It held cash and equivalents of $854 million.
- The company's quarterly dividend of $0.235 per common share is payable on November 29, 2021, to shareholders of record on November 12, 2021.
- "Demand for our products remains strong across categories and channels, and we are continuing to enhance our operational efficiency and capitalize on opportunities while navigating supply chain constraints and inflation," said CEO Keith Allman.
- FY21 Outlook: Masco expects adjusted EPS of $3.67 - $3.73, narrowed from the previous range of $3.65 - $3.75, against the consensus of $3.68.
- Price Action: MAS shares are trading higher by 6.81% at $65.24 on the last check Wednesday.
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