(Reuters) -Home improvement firm Masco Corp on Wednesday withdrew its annual profit forecast, after missing first-quarter sales and profit estimates, hurt by macroeconomic uncertainty stemming from U.S. President Donald Trump’s trade tariffs.
WHY IT IS IMPORTANT
U.S. consumers who held off home renovation projects amid high inflation and mortgage rates now face an anticipated surge in product prices in the wake of the tariff-led trade war, jeopardizing demand turnaround for businesses such as Masco.
KEY QUOTE
“Due to the uncertainty that persists around how these changes will impact demand, pricing, and product costs across our industry, we are not providing full-year financial guidance at this time,” CEO Keith Allman said.
CONTEXT
Masco previously said it had decreased its exposure to China for supplies by 45% since 2018.
The company’s international operations, mostly based in China and Europe, account for 26% of its manufacturing along with 38% of its warehouse and distribution services, as of December 31.
Masco has been implementing price hikes and cost-saving initiatives to counter low volumes as well as high commodity and freight costs.
MARKET REACTION
The company’s shares, which have fallen 15% this year, were flat in premarket trading following the results.
BY THE NUMBERS
Sales at Masco’s plumbing products segment, a major revenue contributor, fell 1% in the quarter ended March 31. Its decorative architectural products division reported a 16% decline in sales.
The company’s adjusted earnings stood at 87 cents per share for the first quarter, compared with analysts’ average estimate of 92 cents, according to data compiled by LSEG.
Its overall quarterly sales fell 6.5% to $1.80 billion, compared with an estimated 4.6% decline to $1.84 billion.
In February, Masco had announced that it expects full-year earnings of $4.20 to $4.45 per share.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Shreya Biswas)
