Sherwin-Williams misses by $0.04, misses on revs; guides Q3 EPS in-line; guides FY17 EPS in-line
- Reports Q2 (Jun) earnings of $4.52 per share, excluding Valspar-related costs, $0.04 worse than the Capital IQ Consensus of $4.56; revenues rose 16.0% year/year to $3.73 bln vs the $3.83 bln Capital IQ Consensus.
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Co issues in-line guidance for Q3, sees EPS of $4.80-5.20, excluding non-recurring items, vs. $4.86 Capital IQ Consensus Estimate.
- Anticipate Sherwin-Williams' core net sales will increase a low to mid single digit percentage compared to last year's third quarter. Expect incremental sales from the Valspar acquisition to be approximately $1.0 billion in the third quarter.
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Co issues in-line guidance for FY17, sees EPS of $14.80-15.20, excluding non-recurring items, vs. $14.81 Capital IQ Consensus Estimate.
- Expect Sherwin-Williams' core net sales to increase by a mid single digit percentage compared to full year 2016. Expect incremental sales from the Valspar acquisition to be approximately $2.4 billion in 2017.
- Based on total Company borrowings, twelve-month interest expense is projected to be approximately $400 million. Incremental depreciation and amortization step-up related to Valspar acquisition purchase accounting is projected to be approximately $275 million on an annual basis. Purchase accounting inventory adjustments of $110 million are being amortized over the three months of June, July and August, 2017. The balance sheet reflects preliminary purchase accounting balances and incremental debt of $9.5 billion used to fund the acquisition.