Cutting costs, Masco posts sales decline in third quarter
Masco Corp. reported that net sales from continuing operations for the quarter ended Sept. 30 declined 6% to $2 billion. North American sales and International sales each decreased 6%.
The Taylor, Mich.-based company posted a third-quarter net loss of $5 million, compared with earnings of $28 million in the year-ago quarter.
During the company's earnings presentation, CEO Tim Wadhams explained the third quarter was a tough one, particularly for sales related to residential construction and remodeling, specifically bigger-ticket items.
Masco anticipates 2010 housing starts to finish in the range of 575,00 to 625,000. Last year's total of 554,000 was the lowest recorded since the government began keeping track in 1959.
The company expects repair and remodeling activity to be "a little bit stronger than new-home construction," Wadhams added.
"Consumer confidence, unemployment and uncertainty, whether it's the political climate, foreclosures, home prices, continue to impact our markets," Wadhams said.
Masco is looking to take $500 million of fixed costs out of its businesses, during the period extending back to the beginning of the downturn.
'We will continue to focus on what we can control to improve our execution and strengthen our brands. That includes driving the Masco Business System across our enterprise, continuing to emphasize innovation and continuing to aggressively manage our fixed costs."
In a prepared statement, Wadhams said: "The slowing economic activity related to our markets, particularly consumer spending and new home construction in North America that we experienced late in the second quarter, continued into the third quarter of 2010. Four of our five product segments had sales declines compared with the third quarter of 2009. Our plumbing products segment was up modestly in sales, principally due to continued strong international results, as Hansgrohe continues to expand globally. Given the decline in sales, we were pleased with our performance from a profitability standpoint, as cost reductions partially offset the impact of volume declines and a less favorable relationship between selling prices and commodity costs compared with third quarter 2009."
Also this week, Masco division Arrow Fastener introduced its new T50 R.E.D. professional manual staple gun and 1-in. brand nail gun.