01—Abstract
Summary
Summary of the 8-K filed February 8, 2024. Cited figures are marked; the original filing is the authoritative source.
Masco Corporation reported fourth-quarter and full-year 2023 results on February 8, 2024, via Exhibit 99 press release.
For Q4 2023, net sales decreased 2 percent to $1,882 milliona, and in local currency and excluding acquisitions decreased 4 percent. Reported operating profit was $247 million, up 34 percent from $185 million, and reported EPS was $0.85 versus $0.51. On an adjusted basis, operating profit rose 16 percent to $272 million, operating margin expanded 230 basis points to 14.5 percent, and adjusted EPS grew 28 percent to $0.83.
For full-year 2023, net sales decreased 8 percent to $7,967 millionb, while reported EPS increased 11 percent to $4.02. Adjusted operating profit decreased 1 percent to $1,336 million, though adjusted operating margin rose 120 basis points to 16.8 percent and adjusted EPS increased 2 percent to $3.86. The company returned $610 million to shareholders through share repurchases and dividends during the year.
Full-year 2023 cash from operating activities was $1,413 millionc net of working capital changes, and total liquidity at year-end was $1,634 million. For 2024, Masco expects sales to be approximately flat in a market that is flat to down low single digits, and anticipates adjusted EPS of $4.00 to $4.25. The board declared a quarterly dividend of $0.29 per share, a 2 percent increase, payable March 11, 2024 to holders of record on February 22, 2024.
02—Key points
Key Highlights
- Q4 2023 net sales decreased 2 percent to $1,882 million; in local currency and excluding acquisitions, decreased 4 percent.
- Q4 2023 adjusted operating margin expanded 230 basis points to 14.5 percent; adjusted EPS grew 28 percent to $0.83.
- Full-year 2023 net sales decreased 8 percent to $7,967 million, with North American sales down 9 percent in local currency.
- Full-year 2023 reported EPS of $4.02 (up 11 percent); adjusted EPS of $3.86 (up 2 percent).
- 2024 guidance: sales approximately flat; adjusted EPS expected in the range of $4.00 to $4.25.
- Returned $610 million to shareholders in 2023 through share repurchases and dividends.
- Quarterly dividend raised 2 percent to $0.29 per share.
03—Questions
Frequently Asked Questions
How did Masco perform in the fourth quarter of 2023?
Net sales fell 2 percent to $1,882 million, but reported operating profit rose 34 percent to $247 million and adjusted operating profit rose 16 percent to $272 million. Gross margin improved sharply, with adjusted gross margin at 35.1 percent versus 29.5 percent a year earlier.
Why did adjusted operating profit decline for the full year while margins improved?
Full-year adjusted operating profit decreased 1 percent to $1,336 million on lower sales (down 8 percent), but adjusted operating margin increased 120 basis points to 16.8 percent, reflecting disciplined pricing and improved operational efficiencies according to CEO Keith Allman.
What is Masco's outlook for 2024?
Management expects sales to be approximately flat for the full year in a market that is flat to down low single digits, and anticipates full-year adjusted EPS of $4.00 to $4.25.
What is the company's dividend policy after this announcement?
The board declared a quarterly dividend of $0.29 per share, a 2 percent increase, payable March 11, 2024 to shareholders of record on February 22, 2024.
What was Masco's liquidity position at year-end 2023?
Total liquidity at the end of the fourth quarter was $1,634 million, including $634 million of cash and cash investments and $1,000 million of revolver availability.
04—Continue