Masco Corp. cut its fourth-quarter net loss by almost 50% from the year earlier period, reporting a loss of $573 million, the company announced today. Net sales increased 1% to $1.74 billion for the period ended Dec. 31.
The fourth-quarter net loss at Taylor, Mich.-based manufacturer, which produces brands such as Behr Paints, Delta Faucets, and KraftMaid Cabinets, was $2 million shy of its total loss for the year. The company also posted a gross profit of $332 million for the quarter, while gross profit margins fell to 21.9% compared to 23.5% a year ago.
The company took all its impairment charges for goodwill and other intangible assets, which came to $494 million, during the quarter. The charge is primarily related to the manufacturer’s North American window business within its other specialty products segment.
For the year, Masco revealed a net loss of $575 million, up from the $1.04 billion net loss reported for 2010. Net sales dipped just under 1% to $7.47 billion. Gross profit fell just under 3% to $1.78 billion as gross profit margin hit 25.1% compared to 26.7% for 2010.
“Our performance in 2011 was challenged by commodity cost volatility, a competitive retail environment, a flat housing environment in North America and difficult economic conditions in Europe,” said Tim Wadhams, Masco’s president and CEO.
The past year marked the completion of the company’s “major rationalization activities,” which included business consolidations, plant closures, employee reductions, and the implementation of new systems. Masco incurred costs and charges totaling $208 million in 2011 related to these initiatives.
As for its segments, Masco’s cabinets and related products units saw net sales fall 6% during the fourth quarter to $287 million as operating loss improved by over $40 million to $95 million. For the year, net sales fell 16% to $1.23 billion as operating loss improved by $44 million to $206 million.
The plumbing products segment reported net sales of $674 million, up 2% from the same period last year. Operating profit fell 19% to $52 million for the quarter. Year-end sales also rose 8% to $2.91 billion as operating profit dipped just under 3% to $322 million.
Masco’s installation and other services unit revealed a 12% growth in fourth-quarter net sales to $285 million, while operating loss improved dramatically to $8 million compared to a $718 million loss a year ago. For the year, net sales were $1.08 billion, up 3% from 2010 as operating losses also improved drastically to $79 million compared to $798 million a year ago.
Decorative architectural products posted net sales of $348 million during the quarter, up 4% from last year. The unit plunged into the red however with a $51 million net loss after reporting $45 million profit during 2010’s fourth quarter. Sales for the year fell 1% to $1.67 billion as operating profit slid 43% to $196 million.
Net sales at Masco’s other specialty products unit dropped 11% during the fourth quarter to $144 million, while nose-diving into the red with a $403 million loss. Net sales fell 3% for the full year to $576 million, while the unit plummeted into the red with a year-end operating loss of $401 million compared to a $19 million profit in 2010.
“While 2011 was a difficult year, we head into 2012 with cautious optimism,” said Wadhams. “Our efforts to reduce costs and increase revenues did not improve performance as quickly as we anticipated in 2011, we firmly believe that these actions will drive significant improvement in 2012, even if we see no improvement in the housing markets.”