Masco Corporation Reports Huge Earnings Miss (MAS)

Masco Corporation MAS reports Q2 earnings of $0.01 versus estimates of $0.13. Masco Corporation reports Q2 revenues of $2.05 billion versus estimates of $2.11 billion. Revenues rose 1.7% year over year. During the second quarter of 2010, the company also recognized non-cash, pre-tax impairment charges for financial investments aggregating $33 million ($.06 per common share, after tax). During the second quarter of 2009, they recognized non-cash, pre-tax impairment charges for financial investments aggregating $7 million ($.01 per common share, after tax). "We had a solid second quarter in terms of operating performance," said Masco's CEO Tim Wadhams. "If we exclude charges for business rationalizations and financial assets, and normalize our tax rate at 36 percent, many of our key measures show nice improvement compared to second quarter of 2009. Gross margins and operating margins would have exceeded 28 percent and eight percent, respectively, the highest levels achieved on an adjusted basis, since 2008.” He added, “In addition, EPS for second quarter of 2010, adjusted for the items above, would have approximated $.16 per common share. Second quarter of 2010 also includes additional interest expense and a change in currency transaction impact from gains to losses which, in aggregate, reduced earnings by $.05 per common share compared to second quarter of 2009. Innovative new products drove market share gains and we continued to drive strong incremental margins in the quarter. We are proud of the Masco Team, worldwide, as we continue to focus on strengthening our leadership brands and enhancing customer experience with our products and services through innovation and quality while continuing to drive lean principles to improve our execution." Shares of MAS were off 4.44% in the after-hours.