Contractor Update

Product and company news from Bloomberg: "Masco Corp., the maker of Behr paint and Delta faucets, posted its first loss in five years and is cutting about 8,000 jobs after a slump in the U.S. housing market. Masco also forecast 2007 profit lower than analysts anticipated."

"Masco will cut 16 percent of its workforce by the end of the first quarter, Chief Executive Officer Richard Manoogian said today on a conference call. Fewer purchases at Lowe's Cos. and Home Depot Inc. and the slowdown in new home construction, which accounts for 40 percent of Masco's sales, hurt revenue in the fourth quarter."

"Masco said profit this year could be less than $1.50 or more than $1.80 a share, depending on new home construction, commodity prices and sales at home-improvement stores. The U.S. housing market fell 13 percent last year, the biggest decline since 1991."

"Sales in the fourth quarter fell 5.8 percent to $2.95 billion, the first decline in at least nine years, because of the new home construction slowdown, which hurt revenue from cabinets and installation services the hardest. Cabinet sales dropped about 12 percent and installation services fell 9 percent."

"Masco will raise prices this year to make up for higher raw- material costs such as brass and copper"

Labels: Construction Industry, Construction News, Material Costs

Building material news from the Associated Press: "Due mostly to the slowdown in new home construction, lumber prices have sunk from a peak of about $1,000 per thousand foot board 18 months ago to around $200 per thousand foot board. In addition, prices for oriented strand boards, or OSB, are at a four-year low."


From Forbes.com: "Lumber and building materials supplier Louisiana-Pacific Corp. on Tuesday posted a fourth-quarter loss due to feeble demand from home builders in the sluggish U.S. housing market."

"'Fourth-quarter sales declined 40 percent compared to the same quarter a year ago, as levels of building activity dropped to the lowest levels we have seen this decade,' said CEO Rick Frost. 'Weakened demand negatively affected volume and pricing in all of our product lines.'"

"Frost cautioned that the first quarter this year 'looks and feels a lot like last quarter, with lower building activity and depressed prices for our commodity products continuing.'"


From Yahoo Finance: "Building Materials Holding Corporation, a leading provider of construction services and building materials to professional residential builders and contractors, today reported sales for the fourth quarter of 2006 decreased 26% from the same quarter a year ago."

"Robert E. Mellor, CEO, stated, 'Our fourth quarter results reflect the on-going correction of inventory levels which currently overhang the housing market. The rapid deterioration of our markets during the second half of the year has made for a very challenging quarter as homebuilders curtail production while excess inventory is absorbed.'"


Finally, from the Houston Chronicle.com: "Mueller Industries Inc., a maker of copper tubes and fitting used in plumbing and refrigeration, said Tuesday the slumping housing market and lower copper prices led to an inventory write down, sending fourth-quarter profits tumbling."

"The latest quarter included a charge of 26 cents per share to write down inventory that lost value as copper prices fell during the period. Mueller said the slumping housing sector also hurt sales volume."

Labels: Construction Industry, Construction News, Material Costs