Masco Corporation MAS is scheduled to report third-quarter 2024 results on Oct. 29, before the opening bell.

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In the last reported quarter, the company’s adjusted earnings beat the Zacks Consensus Estimate by 3.5% and rose 0.8% year over year. However, net sales marginally missed the consensus mark by 0.4% and declined 1.7% year over year.

Masco’s earnings topped the consensus mark in each of the last four quarters, with the average surprise being 11.5%.

The Trend in Estimate Revision of MAS

The Zacks Consensus Estimate for adjusted earnings per share (EPS) has remained unchanged at $1.08 over the past 60 days. The estimated figure indicates 8% growth from the year-ago EPS of $1.

Masco Corporation Price and EPS Surprise

Masco Corporation price-eps-surprise | Masco Corporation Quote

The consensus estimate for net sales is pegged at $1.982 billion, which indicates a 0.1% increase from the prior-year quarter’s figure of $1.979 billion.

Factors Likely to Shape Masco’s Quarterly Results

Revenues

The top line of Masco is expected to have escalated year over year on the back of increased sales and favorable pricing across its Plumbing Products segment. This uptrend is expected to have been pressured to some extent by lower sales volume of paints and other coating products, resulting in lower contributions from its Decorative Architectural Products segment. Furthermore, continued signs of stabilization in the company’s key markets of Europe and China are likely to have added to the uptrend.

Segment-wise, our model expects the Plumbing Products segment’s (which accounted for 59.9% of second-quarter 2024 total net sales) net sales to increase 2% year over year to $1.21 billion. However, the expectations for the Decorative Architectural Products segment’s (which accounted for 40.1% of total net sales in the second quarter) net sales indicate a 2.8% decline year over year to $766.3 million.

Geographically, we expect net sales in North America (which accounted for 81.1% of second-quarter total net sales) to increase 0.2% year over year to $1.6 billion, while net sales in International (which accounted for 19% of second-quarter total net sales) are anticipated to decline 0.3% to $375.9 million.

The focus on operational excellence and continuous improvement, along with the development of innovative products in the North American and International Plumbing businesses, is likely to have aided the company's performance.

Margins

The bottom line of Masco is also expected to have increased year over year thanks to a favorable price-cost relationship and its focus on cost-saving initiatives. Although unfavorable mix, higher employee-related costs and ongoing inflationary pressures are likely to have been headwinds to some extent, the tailwinds mentioned above paired with leverage from an increased top line are expected to have favored the margins of Masco.

Our model predicts the adjusted gross margin and adjusted EBITDA (earnings before interest, tax, depreciation and amortization) to expand year over year to 36.4% and 19.6% from 35.8% and 19.5%, respectively.