Masco Corporation posted modest sales growth in the second quarter, though the company stock rose more than 11% at press time on exceeded expectations.
“Continued growth momentum, solid execution, and the timing of paint promotions enabled us to achieve earnings above our expectations for the quarter,” said Masco’s president and CEO Keith Allman. “Importantly, our Cabinets and Related Products segment accelerated the pace of its turnaround, resulting in better than expected top and bottom line results for that segment. In addition to our strong sales and profit growth, we returned nearly $270 million to shareholders through dividends and share repurchases in the first half of 2015.”
Sales for the quarter were up 3% to $1.9 billion, or 7% excluding the effects of foreign currency translation.
Regionally, sales performed better: an increase of 7% in North America, as well as 5% in International sales in local currency. In U.S. dollars, International sales decreased 10%.
Net income came in at $105 million, down from the previous year's $139 million.
However, a 14.5% adjusted operating profit margin -- a 22% increase -- came from strong performance from all segments.
Additionally, the tax-free spin-off of TopBuild Corp. was completed on June 30, with Masco receiving a $200 million cash distribution.
The company's board of directors also increased the annual dividend by $0.02 per share to $0.38 beginning with the quarterly dividend to be paid in the fourth quarter of 2015.
“Masco has delivered a strong first half of the year and we are proud of our focus and execution,” said Allman. “With the completion of the spin-off of TopBuild Corp., we begin a new chapter in Masco’s history focused on driving shareholder value through our portfolio of industry-leading branded building products, operational excellence and disciplined capital allocation. Our Cabinetry business has returned to profitability and we expect the momentum it has built over the first half of the year to continue. For the balance of 2015, we believe the underlying demand for our market-leading products will increase and that the repair and remodeling environment will continue to improve."