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Sherwin-Williams's Earnings Beat Last Year's by 17%

Sherwin-Williams (NYSE: SHW  ) reported earnings on July 18. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Sherwin-Williams missed estimates on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share increased significantly. GAAP earnings per share grew.

Margins increased across the board.

Revenue details
Sherwin-Williams logged revenue of $2.71 billion. The 14 analysts polled by S&P Capital IQ expected to see revenue of $2.78 billion on the same basis. GAAP reported sales were 5.5% higher than the prior-year quarter's $2.57 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $2.54. The 18 earnings estimates compiled by S&P Capital IQ averaged $2.57 per share. Non-GAAP EPS of $2.54 for Q2 were 17% higher than the prior-year quarter's $2.17 per share. GAAP EPS of $2.46 for Q2 were 13% higher than the prior-year quarter's $2.17 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 45.5%, 80 basis points better than the prior-year quarter. Operating margin was 14.6%, 150 basis points better than the prior-year quarter. Net margin was 9.5%, 60 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $3.03 billion. On the bottom line, the average EPS estimate is $2.71.

Next year's average estimate for revenue is $10.54 billion. The average EPS estimate is $7.93.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 456 members out of 509 rating the stock outperform, and 53 members rating it underperform. Among 195 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 184 give Sherwin-Williams a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sherwin-Williams is hold, with an average price target of $186.93.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Sherwin-Williams. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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3/27/2015 4:03 PM
SHW $281.68 Up +2.36 +0.84%
Sherwin-Williams CAPS Rating: ****