DOW JONES NEWSWIRES
Masco Corp.'s (MAS) fourth-quarter net loss widened on sharply
higher write-downs and slumping sales as the company projected 2009
results below analysts' expectations.
Shares of the maker of faucets, cabinets and other building
products were unchanged in after-hours trading from the Wednesday
close of $7.45. The stock had already lost nearly two-thirds of its
value since September.
Demand for Masco's home-improvement products has fallen prey to
the housing downturn, with new home construction and repair and
remodeling spending is expected to remain weak in 2009. Things
worsened in the fourth quarter for homebuilding as the recession
deepened.
The company sees housing starts falling another 35% this year on
top of 2008's 30% decline to no more than 600,000. That's less than
half the figure of two years ago.
As such, it noted providing guidance at present is "extremely
difficult." Still, Masco projected break-even to a loss of 30 cents
a share, including 8 cents in restructuring charges, this year with
revenue falling by the mid- to high-teens on a percentage basis.
Analysts surveyed by Thomson Reuters projected 2009 earnings of 32
cents a share with revenue falling 13% to $8.5 billion.
All three major ratings agencies downgraded Masco's credit
ratings late last year, amid concern about weakened European
demand, a difficult consumer-credit environment and concerns
Masco's profitability has been under pressure even as the company
shrinks.
Meanwhile, Masco reported a fourth-quarter net loss of $508
million, or $1.45 a share, compared with a year-earlier net loss of
$151 million, or 42 cents a share. Excluding write-downs and
restructuring charges, Masco would have posted a loss of 18 cents a
share, compared with prior-year earnings from continuing operations
of 19 cents.
Revenue dropped 25% to $1.98 billion for Masco, whose product
lines include KraftMaid kitchen cabinets and Delta faucets. In
November, the company affirmed it expected revenue of about $2.16
billion.
Analysts polled by Thomson Reuters most recently expected, on
average, a loss of 5 cents a share on revenue of $2.11 billion.
Gross margin fell to 20.1% from 25.6% amid the sales slump.
North American revenue dropped 24% while international sales
slid 26%, with half the decline due to the stronger dollar.
-By John Kell and Kevin Kingsbury, Dow Jones Newswires;
201-938-5285; john.kell@dowjones.com