Masco Sees Net Income Decline
Masco reported income of $36 million, down 83 percent from $206 million in the same period last year.
Net sales were $2.5 billion, down 16 percent from $3.0 billion for the third quarter of 2007.
North American sales declined 18 percent, and international sales declined 6 percent. The company’s third-quarter results were hurt by lower sales volume to the new home construction market and a decline in consumer spending for home improvement products. The quarter was also affected by a higher tax rate.
In addition, Masco decided in the first quarter of 2008 to sell off several European business units that “were not core to the company's long-term growth strategy,” generating proceeds of $174 million.
The Company continues to focus on the rationalization of its businesses, including sourcing programs, business consolidations, plant closures, headcount reductions and other initiatives. Since late 2006, the company has aggressively reduced its cost structure including closing 14 manufacturing facilities, reducing headcount by 20,000 (which includes an approximate 33 percent of its North American workforce) and reducing installation branches by over 25 percent.
Business conditions remain difficult in the Masco’s markets, as the company experienced a further significant reduction in sales of its products and services late in the third quarter of 2008, which has continued into October. The company continues to estimate that 2008 housing starts will decline to a range of 900,000 to 1,000,000 units, compared to 1.3 million units in 2007. However, the company anticipates that consumer spending for home improvement products and demand for certain of the company's international products will continue to decline more than previously anticipated in the near term.
For the full report on Masco’s Third Quarter 2008 Results, read here.