Net income at Masco Corp. almost tripled to $8 million during the second quarter from the same period a year ago as net sales fell 1% to $2.02 billion, the company reported today. Gross profit at the building products manufacturer fell 2.6% to $532 million.
The company's income for the quarter included $33 million of pre-tax gains related to the sales of financial investments. Masco incurred costs and charges of $15 million and $51 million pre-tax due to plant closures, business consolidations, employee reductions, and other cost-cutting initiatives.
The Taylor, Mich.-based company, whose brands include Delta faucets, Behr paints and Kraftmaid cabinetry, cited the continued downturn in the new home construction industry as well as homeowners' refusal to partake in big-ticket spending as figuring in its performance.
Masco's cabinets and related products segment saw net sales fall 17.5% to $330 million, while operating loss improved by $10 million to $27 million. The company's plumbing products segment witnessed an 11.5% jump in sales to $761 million, while operating profit improved 10.5% to $95 million.
The installation and other services segment suffered a $15 million decline in sales to $294 million, while operating losses widened by $3 million to $26 million. The decorative architectural products segment also suffered losses as net sales fell 2.6% to $492 million and operating profit dropped 17.4% to $90 million.
Contrary to the results, company's president and CEO Tim Wadhams felt confident that both the installed sales and cabinet segment are just beginning to improve.
"We believe that our installation business gained share sequentially in the second quarter of 2011," said Wadhams. "Our North American cabinet business maintained share in the second quarter of 2011, continuing the momentum from the first quarter of 2011. In addition, we further reduced cabinet capacity by idling another manufacturing facility."
Wadhams said forecasting the future is still difficult due to few jobs being created, high energy costs, and declining consumer confidence. He said he believes "growth in the second half of 2011 will be challenged," but the company is confident that the housing market will pick up in the future.