Masco(MAS) - 2024 Q3 - Quarterly Report

Financial Performance - Net sales for Q3 2024 were $1,983 million, flat compared to Q3 2023, while net sales for the first nine months of 2024 decreased by 1% to$ 6,000 million compared to the same period in 2023[59][61]. - Gross profit for Q3 2024 was $725 million, a decrease of 3%, impacted by higher commodity costs and unfavorable sales mix[63]. - Operating profit for Q3 2024 was$ 357 million, down 7% from Q3 2023, primarily due to decreased gross profit and higher selling, general and administrative expenses[64]. - Selling, general and administrative expenses for Q3 2024 increased by 2% to $368 million, mainly due to higher marketing costs[64]. - Net income for Q3 2024 was$ 167 million, a decrease of 33% compared to $249 million in Q3 2023, with diluted income per share falling to$ 0.77 from $1.10[69]. - The effective tax rate for Q3 2024 was 27%, unfavorably impacted by adjustments related to filed tax returns and uncertain tax positions[68]. - Other income (expense), net for Q3 2024 was$ (109) million, significantly impacted by a preliminary loss on the sale of Kichler Lighting of $81 million[67]. Sales Performance by Segment - Net sales for Plumbing Products increased by 2% to$ 1,219 million for the three months ended September 30, 2024, and by 1% to $3,665 million for the nine months ended September 30, 2024[71]. - Decorative Architectural Products segment saw a decrease in net sales of 3% for the three months and 5% for the nine months ended September 30, 2024, primarily due to the divestiture of the Kichler business[74]. - North America net sales were flat for the three months ended September 30, 2024, and decreased by 1% for the nine months, impacted by lower sales volume and the divestiture of Kichler[76]. - International net sales increased by 3% for the three months ended September 30, 2024, driven by higher sales volume, while decreasing by 2% for the nine months[78]. Cash and Investments - Cash and cash investments totaled approximately$ 646 million as of September 30, 2024, compared to $634 million at December 31, 2023[80]. - The company repurchased approximately 6.6 million shares for about$ 486 million during the nine months ended September 30, 2024, with $1.2 billion remaining under the share repurchase authorization[90]. - The company anticipates using approximately$ 750 million of cash for share repurchases in 2024 as part of its long-term capital allocation strategy[90]. - Net cash provided by operations was $668 million for the nine months ended September 30, 2024, primarily driven by operating profit[91]. Strategic Initiatives and Risks - The company aims to offset lower demand and elevated costs through productivity improvements and pricing initiatives[57]. - The acquisition of Sauna360 Group Oy contributed to sales growth in the Plumbing Products segment, while the divestiture of Kichler negatively impacted Decorative Architectural Products sales[72][89]. - Future performance may be influenced by residential repair and remodel activity, new home construction, and the ability to maintain strong brands[96]. - The company faces risks related to supply chain, material costs, and cybersecurity vulnerabilities[96]. - The company emphasizes the importance of attracting and retaining a talented and diverse workforce[96]. - The company is focused on developing innovative products to respond to changing consumer preferences[96]. - Strategic initiatives and acquisition strategies are critical for achieving anticipated benefits[96]. - The company acknowledges the impact of extreme weather events and climate changes on operations[96]. Internal Controls and Legal Matters - The company's disclosure controls and procedures were effective as of September 30, 2024[99]. - There were no changes that materially affected internal control over financial reporting during the quarter ended September 30, 2024[100]. - Legal proceedings involving the company are detailed in the condensed consolidated financial statements[102]. - The company does not undertake any obligation to update forward-looking statements unless required by law[97].