Sales rise 7% as Masco swings to profit in Q2

Masco Corp. has reported net sales of $1.87 billion for its first fiscal quarter, an increase of 7% over sales of $1.75 billion in the first quarter of 2011.

North American sales increased 9% and international sales increased 1%. In local currencies, international sales increased 5% compared with the first quarter of 2011.

Net income for the quarter, which ended March 31, was $33 million, compared with a net loss of $46 million a year ago.

“Sales in the quarter were positively impacted by volume growth in both our repair and remodel and new home construction channel,” said Masco’s CEO Tim Wadhams. “This growth was driven by share gains, new product introductions and positive housing dynamics. Our results this quarter include solid improvement in margins and earnings per share, reflecting our focus on total cost productivity and the positive effects of our operating leverage. In addition, we took steps to strengthen our balance sheet by issuing debt of $400 million at an attractive rate to partially prefund our July 2012 debt maturity.”

In his outlook for the remainder of the year, Wadhams said:  “Our first-quarter results improved compared with last year, and we remain cautiously optimistic for the balance of 2012. We are making progress on our strategic initiatives, which include leveraging our brands, reducing our costs, improving our installation and cabinet segments and strengthening our balance sheet. Our installation and cabinet businesses improved their performance by more than $25 million in operating profit, in aggregate, compared with first quarter 2011. Although the cabinetry business continues to be challenged by aggressive promotional activity and consumers’ deferral of big-ticket purchases, both businesses are benefiting from improved residential new construction and total cost productivity. We continue to believe we will achieve significant improvement in both cabinetry and installation in 2012. Although weak Euro Zone macro-economic conditions remain a concern for 2012, North American housing activity appears to be improving, and we continue to believe we are positioned to outperform the industry recovery.”

Headquartered in Taylor, Mich., Masco is one of the world’s leading manufacturers of home improvement and building products, as well as a leading provider of services that include the installation of insulation and other building products.

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