Summary
The Sherwin-Williams Company (SHW) reported solid financial results for the nine months ended September 30, 2016, showcasing a 3.9% increase in consolidated net sales to $9.073 billion, driven primarily by higher paint sales volume in its Paint Stores Group and a favorable change in revenue classification. Net income for the period rose by 8.4% to $929.7 million, with diluted EPS increasing to $9.85 from $9.03 in the prior year, reflecting improved operating performance and a lower effective tax rate due to the adoption of new accounting standards. Financially, the company demonstrated strong liquidity with a significant increase in cash and cash equivalents. However, the period was also marked by substantial activity related to the pending acquisition of Valspar Corporation, including significant acquisition costs and the establishment of credit facilities. While the core business showed growth, investors should note the ongoing impact of acquisition-related expenses and the potential for future integration challenges and debt load.
Financial Highlights
51 data points| Revenue | $3.28B |
| Cost of Revenue | $1.64B |
| Gross Profit | $1.64B |
| SG&A Expenses | $1.05B |
| Operating Income | $674.50M |
| Interest Expense | $44.10M |
| Net Income | $386.73M |
| EPS (Basic) | $1.40 |
| EPS (Diluted) | $1.36 |
| Shares Outstanding (Basic) | 275.98M |
| Shares Outstanding (Diluted) | 284.32M |
Key Highlights
- 1Consolidated net sales increased by 3.9% year-over-year for the first nine months of 2016, reaching $9.073 billion.
- 2Net income grew by 8.4% to $929.7 million for the first nine months of 2016, compared to $855.8 million in the prior year.
- 3Diluted Earnings Per Share (EPS) increased to $9.85 for the first nine months of 2016, up from $9.03 in the same period of 2015.
- 4Cash and cash equivalents saw a significant increase, growing by $496.8 million during the first nine months of 2016.
- 5The company adopted ASU No. 2016-09, which simplified share-based payment accounting and resulted in a lower effective tax rate and a positive impact on net income and EPS.
- 6Significant progress was made on the planned acquisition of Valspar Corporation, with the company entering into substantial credit agreements to finance the transaction.
- 7The Paint Stores Group continues to be the primary growth driver, with sales increasing 7.5% for the first nine months.