Sherwin-Williams Shares Fall on Lowered Forecast
Sherwin-Williams cut its earnings forecasts for the first quarter and full year Monday, citing lower U.S. sales, rising raw material costs and the weak U.S. economy.
The maker of Dutch Boy, Krylon and Duron paints, whose shares fell 7 percent to $49.95 in premarket trade, said it expects to earn 56 cents to 61 cents per share in the first quarter, down from its prior forecast of 72 cents to 80 cents.
Sherwin-Williams said it expects a low single-digit increase in quarterly net sales, down from its previous expectation for net sales to rise at a low-to-mid-single-digit rate.
Earnings will also be hurt by the timing and severity of raw material cost increases, the company said.
Due to the first-quarter shortfall and the sluggish U.S. economy, the company said it expects 2008 earnings of $4.70 to $4.85 per share, down from its prior estimate of $5.00 to $5.15 per share.
But Sherwin-Williams , based in Cleveland, Ohio, said it still expects full-year sales to rise at a low-to-mid single-digit rate.
Analysts on average had been expecting the company to earn 77 cents per share in the first quarter and $4.99 per share for the year, according to Reuters Estimates.