There was no way Sherwin-Williams
Despite some expectations that full-year earnings could be as low as $3.97 a share, some analysts were holding out hope for profits of as much as $4.17 a share. Sherwin-Williams posted earnings of $4.00 on revenue of $7.98 billion.
The obvious problem for the paint specialist was the continued decline in housing. Net sales in the consumer group, which accounts for more than 14% of Sherwin-Williams' total sales, decreased 7.1% in the fourth quarter because of weakness at the major do-it-yourself chains -- Lowe's
Worsening economies around the world aggravated the situation. Net full-year sales increased 7.8% in the global sales segment, but when Sherwin-Williams translated them back into dollars, it actually resulted in a decrease of nearly 8%. That's similar to the results of another rival: RPMInternational
Management at Sherwin-Williams isn't offering much encouragement for the first quarter. It says that trends indicate there's no turnaround in sight, so it expects high single-digit to low double-digit declines in revenue.
That means Sherwin-Williams will have to face this challenge with a series of cost controls. However, the company remains solidly profitable, albeit at lower levels than what many analysts were hoping for. At 11 times earnings, though, the stock is not the cheapest it has been and could even be considered fairly valued. Investors might want to wait a bit before they add Sherwin-Williams to their portfolios.
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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. RPM International and PPG Industries are Income Investor recommendations. Home Depot is an Inside Value selection. You can see Rich's holdings. The Motley Fool has a disclosure policy.