Fortune Brands announces Q2 growth, Sentry Safe acquisition
After a slow first quarter, Fortune Brands and Home Security saw a second-quarter 10% year-over-year sales bump. The company also announced that it had acquired Sentry Safe for $117.5 million.
In the second quarter, Fortune Brands reported $1.4 billion in sales, and $136.6 million in operating income before charges and gains — a $20.1 million increase over the second quarter of 2013. The total company’s pre-gains operating income grew by 28%.
Sales also increased across Fortune Brands’ various product segments. The cabinetry division saw a 19% sales increase over the same period in 2013, with a 31% increase in pre-gains operating income. Both its security and storage, as well as its plumbing sales grew 5% over the same quarter in 2013. Its windows and door division saw a 53% year-over-year increase in income.
“Our teams executed well, delivering a solid second quarter as consumer traffic is increasing and demand gradually improved from the soft start to the year,” said Chris Klein, CEO of Fortune Brands. “We continue to gain share and remain on track to deliver strong growth this year.”
As its segments grow, the company’s holdings have as well. The Sentry Safe acquisition, which closed on July 29, will see the Rochester, New York-based safe company merged with Master Lock.
“Sentry Safe’s global brand strength in the adjacent personal safe market enables Master Lock to broaden its product offerings and leverage its iconic brand worldwide," Klein said. “Both companies hold similar competitive advantages in their markets and produce products that protect people’s most valuable assets.”
With the acquisition and its second-quarter growth, the company projects a market growth of 6% to 8%.
Weyerhaeuser turns a profit on forest products
Weyerhaeuser Co. reported strong figures for the second quarter of 2014, with positive results the company attributed to the recent divestment of its home-building business and doubled-down focus on its wood products.
"The strong results for each of our businesses in the second quarter reflect our relentless focus on operational excellence," said Doyle Simons, president and CEO. "Through the recent divestiture of our home-building business and last year’s Longview Timber acquisition, we have created a focused forest products company committed to driving operational improvements and fully capitalizing on the continued measured recovery in U.S. housing markets and the overall economy."
Net sales for the company tapped in at $1.96 billion, up 4.8% from $1.87 billion in the same period last year.
Net earnings attributable to shareholders was $280 million, up 42.9% from the second quarter of 2013. This includes an after-tax earnings of $22 million from discontinued operations, namely that of Weyerhaeuser Real Estate Company (WRECO), which merged with TRI Pointe Homes earlier in July.
Weyerhaeuser’s wood products business experienced a 19.9% sales boost to $1.07 billion, with higher sales volumes across the board and higher average selling prices for engineered wood products. However, there were lower average realizations for lumber and oriented strand board.
The company also noted strong demand for domestic and Chinese export logs, which contributed to higher volumes in the West.
Weyerhaeuser also predicted lower earnings for the third quarter from its Timberlands segment, with seasonally lower sales volumes and prices for domestic and export logs in the West. Higher silviculture and road costs are anticipated for the South, offset by increased fee harvest volumes.
Unemployment ticks up to 6.2% in July
The national unemployment rate reversed its steady downward direction in July, ticking up slightly to 6.2% with the addition of 209,000 jobs, the Department of Labor reported.
However, a greater number of people entered the labor market last month, a sign that prospects could be improving for discouraged and long-term unemployed workers. July saw 741,000 discouraged workers, down by 247,000 year-over-year. However, the number of long-term unemployed, those employed part-time for economic reasons and the civilian labor force participation rate were little changed in July.
The majority of the job gains were in professional and business services, which added 47,000 jobs in July. Manufacturing took second place at a gain of 28,000 jobs, followed by retail trade at 27,000.
The construction industry also made some progress, adding 22,000 jobs.
On a seasonally adjusted basis, building material and garden supply stores saw a 2.6% boost in the size of their payrolls.
July’s overall job growth was markedly below the strong pace in June, which, when upwardly revised, saw the creation of 298,000 jobs.
The slowdown could provide an incentive for the Federal Reserve to keep interest rates low for some time still, easing into a gradual recovery.