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Letter to the Editor
Monday July 27
Sherwin-Williams 2Q Profit Falls 7 Percent
Paint maker Sherwin-Williams said Tuesday that its profit in the second quarter dropped seven percent as the economic downturn cut into its paint sales, but its earnings exceeded what analysts were looking for.The company reported earnings of $158 million in the second quarter of 2009 compared with $171.7 million in the second quarter of 2008. Revenue dropped by 12.6 percent to $1.95 billion, from $2.23 billion a year earlier.
The Global Finishes Group's net sales stated in U.S. dollars decreased 16.2 percent to $409.7 million in the quarter and 18.8 percent to $772.2 million in six months, due primarily to lower paint sales volume and unfavorable currency translation rate changes that were partially offset by acquisitions and selling price increases. In the quarter and six months, unfavorable currency translation rate changes decreased net sales of the Global Finishes Group in U.S. dollars by 8.5 percent and 9.5 percent, respectively, and acquisitions increased net sales by 1.6 percent and 2.0 percent, respectively. Stated in U.S. dollars, Global Finishes Group segment profit in the quarter decreased to $31.2 million from $48.0 million and decreased in six months to $36.5 million from $91.1 million last year. Segment profit declined in the quarter and six months primarily due to reductions in sales and unfavorable operating efficiencies related to lower manufacturing volume partially offset by good expense control. As a percent to net external sales, segment profit was 7.6 percent in the quarter versus 9.8 percent last year and 4.7 percent in six months compared to 9.6 percent in 2008.
"We continue to manage through this unprecedented downturn in global paint demand that has affected virtually every segment of the market," Christopher M. Connor, chairman and chief executive, said in a statement.
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