Sherwin-Williams sales hit new high,
but costs continue to pinch profits
The Sherwin-Williams Company reported
a 12. 7 percent increase in 2011 sales, as
the company finished with a 9.2 percent
fourth-quarter gain in sales compared to
the same period a year earlier.
Net income, however, declined for the
year and was down sharply in the fourth
quarter as continued escalation of raw-material costs cut into earnings.
Sales for the year totaled $8.77 billion, an
increase of $989.3 million from 2010, while
fourth-quarter sales rose 9.2 percent to $2.07
billion from the same period a year earlier.
Net income for the year was $442.86
million, down from $462.38 million in
2010. Fourth-quarter net income was
$14.55 million, compared to $72.92 million in the fourth quarter of 2010.
The company said stronger sales were
driven by a combination of selling-price increases, acquisitions and higher paint sales
volume in the Global Finishes and Latin
America Coatings groups. The company’s
sprawling Paint Stores Group also contributed to sales growth, as architectural
paint sales strengthened and selling-price
increases were implemented. Acquisitions
accounted for a 4. 5 percent sales gain for
the year.
The company also announced that, effective with the fourth quarter of 2011, it
has expanded its reports on operating segments from three to four with the addition
of the Latin America Coatings Group. The
new segment’s results were previously included in the Global Finishes Group.
The company said the move reflects
“continued revenue growth and geographic
expansion of our Global Finishes Group,”
and added that the change “allows for a
clearer view of our business results.”
Chairman and chief executive Christo-
pher Connor said the company was able
to post record-high sales and earnings per
share in 2011 despite “an environment of
soft demand and rapidly escalating raw-
material costs. Our operating segments
continue to control costs and implement
price increases in an effort to keep pace
with rising raw material increases.”
Connor said the company’s immense
Paint Stores Group “continued to focus
on gaining market share in all markets
and product lines, while maintaining cus-
tomer service in a difficult raw-material
environment.” He also said the company
is seeing “continued sales development in
the Global Finishes Group and the corre-
sponding improvement in the Group’s
core operating profit.”
Connor added that sales have been
boosted by the acquisition of the UK com-
pany Leighs Paints, while “acquisitions
completed over the past 18 months are per-
forming to expectations, and provide im-
portant assets to support the future growth
in our world-wide business. Our Latin
America Coatings Group increased gallons
across all product lines, controlled costs, and
delivered strong profit growth in the year.”
Sales for the Paint Stores Group in-
creased 9.1 percent to $4.78 billion for
the year, and rose 13. 5 percent to $1.13
billion in the quarter due primarily to sell-
ing-price increases and improving domes-
tic architectural paint sales volume across
most segments.
Paint Stores Group profit was $645.7
million, up from $619.6 million in 2010,
but declined $1.4 million, to $133.4 million, in the fourth quarter compared to
the same period a year earlier.
Net sales from stores open for more than
12 calendar months rose 8. 3 percent in the
year and 12. 7 percent in the quarter compared to the same periods a year earlier.
The increase in profits for the year was
the result of selling-price increases, partially offset by raw material cost increases
and other expenses related to maintaining
customer service, the company said. The
same factors were cited as contributors to
the fourth-quarter profit dip.
Consumer Group sales declined 1.8
percent, to $1.27 billion for the year, and
fell 1.1 percent, to $252.1 million, for the
quarter compared to 2010, primarily due
to elimination of a portion of a paint pro-
gram with a large retail customer said the
company. Segment profit decreased to
$173.7 million in the year from $204.0
million in 2010 due primarily to higher
raw-material costs and the impact of the
retail-customer program reduction.
For the fourth quarter, Consumer
Group profit increased to $30.2 million
from $26.1 million in 2010, due primarily
to selling-price increases and cost controls,
the company said.
Global Finishes Group sales stated in U.S.
dollars increased 32. 5 percent to $1.88 billion in the year, due primarily to acquisitions,
selling-price increases, higher paint sales volume and favorable currency translations. For
the quarter, Global Finishes Group sales increased 8.1 percent to $463.3 million.
Global Finishes Group profit for the
year rose to $90.3 million from $64.7 million in 2010, and for the quarter increased
to $13.0 million from $9.2 million in the
same period a year earlier.
Latin America Coatings Group net sales
increased 22.7 percent to $828.5 million in
the year, and rose four percent to $220.1 million in the quarter. Segment profit for the
year was $75.5 million, up from $59.0 million in 2010, and for the quarter rose to
$26.4 million from $19.6 million in 2010.
Connor said the company is “
continuing to invest in our business” by expanding
its Paint Stores operations, with a net increase of 60 new stores in 2011, to a total
of 3,450 stores. In the fourth quarter, the
company topped 4,000 total stores and
branches, counting all business segments.
PPG Industries 4Q net up 5.4%
on industrial coating growth
PPG Industries reported net sales for the
fourth quarter 2011 of $3.5 billion, an increase of four percent versus the prior year’s
fourth quarter. Net income for the quarter
increased to $216 million, or $1.39 per diluted share. Fourth quarter 2010 net sales
were $3.4 billion, and net income was $205
million, or $1.24 per diluted share.
PPG’s annual sales for 2011 were $14.9
