Masco Corp. (MAS) swung to a first-quarter net loss amid
restructuring charges and lower sales of new home construction
products and services.
The maker of faucets, cabinets and other building products also
boosted its estimate for 2009 restructuring charges as it lowered
its sales target.
Masco said last month it expects "extremely challenging" market
conditions lasting for "the next several quarters," and in response
has limited its share repurchases and reduced its quarterly
dividend to preserve liquidity. Building- materials companies have
been particularly hard hit by the commercial and residential real
estate downturn, as many straddle more than one industry and
provide products for both builders and consumers.
For the first quarter, Masco reported a net loss of $74 million,
or 23 cents a share, compared with year-earlier net income of $14
million, or break-even a share. The latest period included charges
of 4 cents a share related to job cuts, plant closures and other
consolidation initiatives, while the prior year's quarter included
similar charges of 2 cents.
Revenue dropped 26% to $1.82 billion for Masco, whose product
lines include Kraftmaid kitchen cabinets and Delta faucets.
Analysts polled by Thomson Reuters expected a per-share loss of
12 cents on revenue of $1.88 billion.
Gross margin slumped to 22.9% from 25.7%.
North American revenue fell 24%, while international sales
dropped 31%. International sales would have dropped 18% excluding
the impact of the stronger dollar.
Looking ahead, Masco said it expects restructuring charges to
total 13 cents a share for the year, up 5 cents from its earlier
view. The company also lowered the high end of its full-year view,
seeing a loss of 2 cents to 22 cents, on a sales decline of about
20% to 25%, from its February view of a profit of 8 cents to a loss
of 22 cents on a revenue decline in the mid- to high-teens on a
percentage basis.
The company said Monday that in late April it modified the terms
of its five-year revolving credit facility, increasing its
borrowing capacity to $1.25 billion, to help boost financial
flexibility.
Shares were unmoved in after-hours trading at $9.75. The
company's stock has lost over half its value from its 52-week high
in September.
-By John Kell, Dow Jones Newswires; 201-938-5285;
john.kell@dowjones.com
