Valspar Tops Earnings Expectations, Stock Jumps

Paint and coatings company Valspar said its revenue and adjusted earnings each increased by about 10 percent in its first quarter.

Valspar Corporation’s stock climbed about 8 percent Wednesday morning on strong first-quarter revenue gains and adjusted earnings that beat analysts’ expectations.
The Minneapolis-based paint and coatings manufacturer said profits in its paints segment were bolstered by robust growth in the United States, as well as international markets such as China and Australia.
Valspar said it saw similar growth in its coatings segment due to acquisitions—the company bought $200-million European coatings manufacturer Inver Group in June—as well as continued growth in its wood coatings product line.
Valspar announced that net earnings for the first quarter, which ended January 24, totaled $53.5 million, or $0.61 per share, down 3 percent from $55.1 million, or $0.60 per share, during the same period in 2013. Its adjusted earnings per share, however, which excludes restructuring charges, was $0.70 per share, $0.04 higher than what analysts polled by Thomson Reuters had expected. Excluding the $7.5 million in restructuring charges, the company’s adjusted income climbed 11 percent to $61.1 million.
Revenue, meanwhile, totaled $956.1 million, up 9.2 percent from $875.2 million in the first quarter of 2013. First-quarter revenue was just above analysts’ projections of $948.6 million.
Shares of Valspar’s stock were trading up about 6.3 percent at $75.03 per share by Wednesday afternoon.
“We are pleased to report a good start to our fiscal year,” Chairman and CEO Gary Hendrickson said in a statement. “We saw strong growth in both our paints and coatings segments, reflecting the benefits of new business wins, acquisitions, and productivity improvements.”
The company reaffirmed its full-year earnings guidance of $3.95 to $4.15 per share.
Valspar is among Minnesota’s 20 largest public companies based on revenue, which totaled $4.1 billion in its most recently completed fiscal year.