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Sherwin-Williams (SHW) Q4 Earnings Miss Estimates, Sales Meet

The Sherwin-Williams Company SHW logged earnings (as reported) of $1.15 per share in fourth-quarter 2021, down 22.8% from $1.49 in the year-ago quarter.

Barring one-time items, adjusted earnings in the reported quarter were $1.34 per share. The figure missed the Zacks Consensus Estimate of $1.35.

Sherwin-Williams posted revenues of $4,762.1 million, up 6.1% year over year. The figure was in-line with the Zacks Consensus Estimate. The top line increased mainly owing to higher selling price in all segments and increased product sales volume in the Performance Coatings Group unit that more than offset by reduced sales volumes in The Americas Group and the Consumer Brands Group units largely due to raw material availability issues.

The SherwinWilliams Company Price, Consensus and EPS Surprise

 

The SherwinWilliams Company price-consensus-eps-surprise-chart | The SherwinWilliams Company Quote

 

Segmental Review

The Americas Group segment registered net sales of $2,653.5 million in the fourth quarter, up 3% year over year. The upside was primarily due to selling price increases in all end markets, partly offset by reduced sales volume of paint products as a result of raw material availability challenges and pandemic-led labor headwinds.

Net sales in the Consumer Brands Group segment declined 7.8% year over year to $565.3 million. The downside was mainly caused by lower sales volume to all of the company’s retail consumers stemming from raw material availability issues and the Wattyl divestiture.

Net sales in the Performance Coatings Group increased 18.7% year over year to around $1,542.5 million in the reported quarter. The upside can be attributed to higher sales volumes in all end markets served and elevated selling prices.

Financials and Shareholder Returns

At the end of 2021, Sherwin-Williams had cash and cash equivalents of $165.7 million, down 26.9% year over year. The long-term debt increased 3.9% year over year to $8,590.9 million.

The company repurchased around 10.1 million shares of its common stock during the year. It had remaining authorization to repurchase roughly 48.6 million shares through open market purchases at the end of 2021.

Outlook

The company expects consolidated net sales to increase low-to-mid single-digit percentage in first-quarter 2022. For 2022, net sales are expected to increase high-single digits to low double digits. The company also expects adjusted earnings per share for 2022 between $9.25 and $9.65.

Price Performance

Shares of Sherwin-Williams have gained 23.3% in the past year compared with a 19.7% rise of the industry.

Image Source: Zacks Investment Research

 

Zacks Rank & Key Picks

Sherwin-Williams currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Albemarle Corporation ALB, Nutrien Ltd. NTR and AdvanSix Inc. ASIX.

Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 51.3% for the current year. The Zacks Consensus Estimate for ALB's earnings for the current year has been revised 5.4% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average being 22.1%. ALB has rallied around 23.6% over a year.

Nutrien, sporting a Zacks Rank #1, has a projected earnings growth rate of 53.8% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 17.4% upward in the past 60 days.

Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 73.5%, on average. NTR has rallied around 35.3% in a year.

AdvanSix has a projected earnings growth rate of 7.4% for the current year. The Zacks Consensus Estimate for ASIX’s earnings for the current year has been revised 5.3% upward in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average being 46.9%. ASIX has surged 90% over a year. ASIX sports a Zacks Rank #1.




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