Masco Q4 Earnings Beat, Sales Miss, Adjusted Operating Margin Up Y/Y

Masco Corporation’s MAS fourth-quarter 2024 earnings topped the Zacks Consensus Estimate and grew year over year. Earnings topped expectations in six of the trailing seven quarters. On the other hand, the net sales missed the consensus mark and tumbled year over year.Find the latest earnings estimates and surprises on Zacks Earnings Calendar.The quarter’s top-line results reflect lower sales volume for North American plumbing products, lower net selling prices of decorative architectural products and an unfavorable sales mix of plumbing products. However, the bottom line was favored by lower selling, general and administrative (SG&A) expenses, favorable net selling prices and strategic cost savings initiatives.Notably, Masco’s focus on a balanced capital deployment strategy helped it return $331 million to shareholders during the quarter via dividends and share repurchases.Moving into 2025, the company aims to continue maintaining shareholder value through its top-tier repair and remodel-oriented product portfolio, strong balance sheet and disciplined capital allocation.MAS stock lost 3.4% in the pre-market trading session on Tuesday.Inside MAS’ HeadlinesThe company reported adjusted earnings per share (EPS) of 89 cents, which topped the Zacks Consensus Estimate of 88 cents by 1.1%. In the year-ago quarter, it reported an adjusted EPS of 83 cents.Net sales of $1.83 billion marginally missed the consensus mark of $1.84 billion by 0.5% and declined 3% from the prior-year period. Excluding divestitures, net sales inched up 1% year over year in local currency.Masco Corporation Price, Consensus and EPS Surprise Masco Corporation price-consensus-eps-surprise-chart | Masco Corporation QuoteNet sales in the North American region slipped 4% (in local currency) from the prior year. Internationally, the metric increased 2% in local currency.Masco’s Segmental AnalysisPlumbing Products: Net sales in the segment declined 1% year over year to $1.19 billion. Currency had a minimal impact on the net sales value. North American sales dwindled 2% year over year while International sales increased 2% in local currency.The adjusted operating margin expanded 40 basis points (bps) year over year to 16.8%, attributable to cost savings initiatives and lower expenses, partially offset by unfavorable volume mix and higher commodity and freight costs. Adjusted EBITDA remained flat year over year at $228 million.Decorative Architectural Products: The segment reported sales of $639 million, down 6% from the prior-year period. In local currency and after excluding divestitures, the segment’s net sales increased 5% year over year. Total paint sales decreased in low single digits. PRO paint sales increased in the high single digits but DIY paint sales decreased in mid-single digits.Adjusted operating margin improved 290 bps from the prior-year level to 17.7%, driven by incremental volume and cost savings initiatives, partially offset by an unfavorable price/cost relationship. Adjusted EBITDA increased to $120 million from the prior-year figure of $110 million.Margin Performance of MASAdjusted gross margin contracted 30 bps from the prior-year level to 34.8%. Adjusted selling, general and administrative expenses — as a percentage of net sales — were down 170 bps to 18.9% from the year-ago figure of 20.6%.Adjusted operating margin improved 140 bps on a year-over-year basis to 15.9%. Adjusted EBITDA grew year over year to $328 million from $314 million.Sneak Peek at Masco’s 2024 ResultsFor the full year, the company reported net sales of $7.83 billion, down 2% year over year. Net sales declined 1% (excluding acquisitions and divestitures) in local currency. On a year-over-year basis in local currency, North American sales declined 2% while International sales remained flat.Adjusted gross margin expanded 110 bps from the prior-year level to 36.3%. Adjusted selling, general and administrative expenses — as a percentage of net sales — were up 30 bps to 18.7% from the year-ago figure of 18.4%.Adjusted operating margin increased 70 bps on a year-over-year basis to 17.5%. Adjusted EBITDA grew 2.5% year over year to $1.52 billion.The company reported an adjusted EPS of $4.10, up 6% from $3.86 reported in 2023.MAS’ FinancialsAs of Dec. 31, 2024, Masco had a total liquidity of $1.634 billion, almost at par with the 2023-end figure. This includes cash and cash investments of $634 million, which is at par with the value recorded at 2023-end. Long-term debt of $2.945 billion was also flat from 2023-end.Net cash from operating activities was $1.08 billion in 2024 compared with $1.41 billion in the prior-year period.During the reported period, the company repurchased 10 million shares for about $757 million (inclusive of excise tax of $6 million) in 2024. It returned $254 million during the year as dividends. Notably, the company’s board of directors also announced a 7% hike in its quarterly dividend payment to 31 cents per share ($1.24 annually) for the first quarter of 2025.Masco Unveils 2025 GuidanceThe company expects its adjusted EPS to be in the range of $4.20-$4.45.Net sales are expected to be approximately flat to up low-single digits when adjusted for divestitures and currency. The company expects demand across the global repair and remodel markets to be flat to down low single digits year over year.Net sales in the Plumbing segment are still anticipated to increase/decrease in the low single digits. The metric in the Decorative Architectural segment is now expected to be down in the mid-single digits.Adjusted operating margin for the year is expected to be approximately 18%. Th company expects the adjusted operating margin to be between 19% and 19.5% in both the Plumbing Products and Decorative Architectural Products segments.For 2026, adjusted operating margin for Plumbing Products is anticipated to be about 20% while the same for the Decorative Architectural Products segment is expected to be between 19% and 20%.MAS’ Zacks Rank & Recent Construction ReleasesMasco currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.AECOM ACM reported impressive results for first-quarter fiscal 2025, where earnings surpassed the Zacks Consensus Estimate and grew on a year-over-year basis. Revenues also increased from the prior year, backed by solid organic net service revenue (“NSR”) growth in its design business. Also, the strong improvement was backed by the benefits received from high-returning organic growth initiatives.As of the fiscal quarter’s end, the total backlog was $23.88 billion compared with $23.32 billion reported in the prior-year period. The current backlog level includes 55.2% contracted backlog growth. ACM’s pipeline of opportunities increased to a new record, driven by double-digit growth in later-stage opportunities with award decisions expected over the next several quarters. The company anticipates to generate 5-8% organic NSR growth in fiscal 2025.PulteGroup Inc. PHM has reported remarkable fourth-quarter 2024 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate and grew year over year. The quarter’s result reflects the company’s success in addressing the affordability issues of the housing market due to a still high mortgage rate.By implementing several operational changes, including targeted sales incentives and faster construction cycle times, it was able to drive its home sales and foster new orders. Also, the increase in the average selling price of homes closed aided the quarter’s top-line growth. In 2024, PHM invested about $5.3 billion into its business, returned $1.4 billion to its shareholders through stock repurchases and dividends and generated a return on equity of 27.5%.Weyerhaeuser Company WY reported mixed results for the fourth quarter of 2024. Its earnings beat the Zacks Consensus Estimate while net sales missed the same. On a year-over-year basis, both metrics declined due to lower fee harvest volumes in the West.In the quarter, domestic sales volumes were moderately higher, while export volumes declined as the company shifted volumes from China to domestic customers. Sales realizations were slightly lower due to product mix, while per-unit log and haul costs remained unchanged. Additionally, distribution results declined compared with the third quarter, impacted by seasonally lower sales volumes. Despite market challenges, WY expanded its timberlands through acquisitions and invested in an engineered wood products portfolio in 2024. With a strong balance sheet, the company is well-positioned to navigate market conditions and focus on long-term growth.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Weyerhaeuser Company (WY): Free Stock Analysis Report Masco Corporation (MAS): Free Stock Analysis Report PulteGroup, Inc. (PHM): Free Stock Analysis Report AECOM (ACM): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks