Masco Corporation Reports First Quarter 2021 Results

Rhea-AI Summary

Masco Corporation (NYSE: MAS) reported a strong first quarter in 2021, achieving a 25% increase in net sales to $1,970 million and an 89% rise in adjusted earnings per share. North American and international sales rose 21% and 27%, respectively. Gross margins increased to 35.5%, while operating profit surged 62% to $365 million. The company returned $339 million to shareholders through dividends and buybacks, while also refinancing debts to reduce interest expenses. Masco raised its earnings per share forecast for 2021 to $3.50-$3.70.

Positive

• Net sales increased 25% to $1,970 million.
• Adjusted earnings per share rose 89%.
• Operating profit surged 62% to $365 million.
• Gross margins increased to 35.5%.
• Returned $339 million to shareholders via dividends and share repurchases.
• Liquidity at $1,838 million.

Negative

• Income from continuing operations decreased to $0.34 per share, down from $0.48 per share.

Masco Corporation (NYSE: MAS), one of the world’s leading manufacturers of branded home improvement and building products, reported its first quarter results.

“We achieved another outstanding quarter,” said Masco President and CEO, Keith Allman. “We capitalized on the continued strong demand for our products to deliver exceptional sales growth, margin expansion and an 89 percent increase in adjusted earnings per share. We also continued our capital deployment of our strong free cash flow by returning $339 million to shareholders through dividends and share repurchases during the quarter. Finally, we further strengthened our balance sheet and reduced interest expense through the successful refinancing of our 2022, 2025 and 2026 debt maturities.”

2021 First Quarter Commentary

• On a reported basis, compared to first quarter 2020:
  • Net sales increased 25 percent to $1,970 million; in local currency and excluding acquisitions, net sales increased 19 percent
  • In local currency, North American sales increased 21 percent and international sales increased 27 percent
  • Gross margins increased 90 basis points to 35.5 percent from 34.6 percent
  • Operating profit increased 62 percent to $365 million
  • Operating margins increased 430 basis points to 18.5 percent from 14.2 percent
  • Income from continuing operations decreased to $0.34 per share, compared to $0.48 per share
• Compared to first quarter 2020, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 25 percent, were as follows:
  • Gross margins increased 80 basis points to 35.6 percent compared to 34.8 percent
  • Operating profit increased 61 percent to $366 million from $228 million
  • Operating margins increased 420 basis points to 18.6 percent compared to 14.4 percent
  • Income from continuing operations increased to $0.89 per share, compared to $0.47 per share
• Liquidity at the end of the first quarter was $1,838 million (including availability under our revolving credit facility)
• Plumbing Products’ net sales increased 31 percent; in local currency and excluding acquisitions, sales increased 22 percent
• Decorative Architectural Products’ net sales increased 15 percent; in local currency and excluding acquisitions, sales increased 13 percent

“Masco is off to a strong start in 2021,” said Allman. “Our markets remain strong, and we continue to demonstrate our ability to execute extremely well in this dynamic environment. We have taken actions and developed further plans to offset the raw material and logistics inflation that we are experiencing. While we anticipate these challenges will continue for the next few quarters, we believe we are well prepared and will continue to adjust to deliver value for our customers and our shareholders. Based on our strong performance in the first quarter and continued strength in our markets, we now anticipate our earnings per share for 2021 to be in the range of $3.50 to $3.70 per share, increased from our previous expectation of $3.25 to $3.45 per share,” concluded Allman.

About Masco

Headquartered in Livonia, Michigan, Masco Corporation is a global leader in the design, manufacture and distribution of branded home improvement and building products. Our portfolio of industry-leading brands includes Behr® paint; Delta® and Hansgrohe® faucets, bath and shower fixtures; Kichler® decorative and outdoor lighting; and HotSpring® spas. We leverage our powerful brands across product categories, sales channels and geographies to create value for our customers and shareholders. For more information about Masco Corporation, visit www.masco.com

FAQ

What were Masco's first quarter 2021 net sales?

Masco's net sales for the first quarter of 2021 were $1,970 million, a 25% increase compared to the previous year.

How much did Masco's adjusted earnings per share increase in Q1 2021?

Masco's adjusted earnings per share increased by 89% in the first quarter of 2021.

What is Masco's earnings per share forecast for 2021?

Masco raised its earnings per share forecast for 2021 to a range of $3.50 to $3.70.

What were Masco's gross margins in Q1 2021?

Masco's gross margins increased to 35.5% in the first quarter of 2021.

How much cash did Masco return to shareholders in Q1 2021?

Masco returned $339 million to shareholders through dividends and share repurchases in the first quarter of 2021.

What was the liquidity position of Masco at the end of Q1 2021?

At the end of the first quarter of 2021, Masco had liquidity of $1,838 million.