10-Q · July 29, 2026
Masco delivered strong second-quarter profitability, with diluted EPS up 25% to $1.60 and operating margin up 350 basis points to 23.6%, but revenue declined 3% to $1.992 billion as North American volume weakened.…
Earnings analysis · 10-Q
MAS earnings analysis
Filed October 28, 2026 · Our reading of the company's report
The latest report
Masco delivered a strong third quarter, with revenue up 3% to $1,966 million, diluted EPS up 30% to $1.17, and operating margin expanding 140 basis points to 17.2%. Plumbing Products drove the result, while Decorative…
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Masco delivered a strong third quarter, with revenue up 3% to $1,966 million, diluted EPS up 30% to $1.17, and operating margin expanding 140 basis points to 17.2%. Plumbing Products drove the result, while Decorative Architectural Products remained flat on revenue and declined 2% in operating profit. Cash generation was solid, with $788 million of nine-month operating cash flow and $116 million of capital expenditures, but demand remains challenged and results benefited from an approximately $90 million net tariff refund benefit. Balance-sheet flexibility is tempered by $300 million of term debt and approximately $1.0 billion of anticipated 2026 share repurchases.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.17
What stood out
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Revenue and EPS beat consensus
Third-quarter net sales increased 3% to $1,966 million from $1,917 million, while diluted EPS rose 30% to $1.17 from $0.90, exceeding the provided $1.02 consensus EPS estimate and $1,928.9 million revenue estimate.
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Material margin expansion
Gross profit increased 10% to $720 million, expanding gross margin by 240 basis points to 36.6% from 34.2%. Operating profit rose 12% to $338 million, with operating margin up 140 basis points to 17.2%.
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Plumbing Products drove growth
Plumbing Products led performance, with revenue up 4% to $1,338 million and operating profit up 24% to $244 million. Management cited pricing, cost savings, lower tariff costs and higher North America volume as key drivers.
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Net income grew 22%
Net income increased 22% to $230 million, and diluted EPS increased 30% to $1.17. The effective tax rate improved to 25.5% from 27.5%.
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Strong cash generation and low capex
Nine-month operating cash flow was $788 million, while capital expenditures were $116 million, implying approximately $672 million of operating cash flow after capital expenditures. Capital expenditures represented approximately 2.0% of nine-month sales of $5,875 million.
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Tariff refunds supported profitability
The company received or recognized benefits from IEEPA tariff refunds, including a net tariff benefit of approximately $90 million in the first nine months. Management stated that pricing, cost savings and sourcing changes are being used to mitigate elevated tariff and input costs.
What to watch
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Demand and volume remain pressured
Management warned that lower market demand may continue amid geopolitical and macroeconomic uncertainty. In the third quarter, lower volume in Decorative Architectural Products and International Plumbing Products reduced sales by 2% in aggregate, while unfavorable mix reduced sales by 1%.
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Tariff benefit may not recur
Tariff and input-cost exposure remains material, particularly in Plumbing Products. The company recorded an approximately $90 million net IEEPA tariff benefit in the first nine months, but continues to face elevated commodity, employee-related and China-related tariff costs.
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Restructuring charges continue
Restructuring actions generated approximately $13 million of charges in the third quarter and $33 million in the first nine months; management expects approximately $50 million of charges for full-year 2026.
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Debt-funded buybacks raise leverage
Leverage and capital deployment increased: $300 million was borrowed under the delayed-draw term loan at a weighted-average interest rate of 4.517% and used for share repurchases. The company repurchased approximately $861 million of stock in the first nine months and anticipates approximately $1.0 billion of 2026 repurchases.
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Lower cash and higher interest cost
Cash and cash investments declined to approximately $610 million from $647 million at December 31, 2025, while interest expense increased to $29 million from $25 million in the third quarter.
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No formal risk-factor update
No material changes to the risk factors in the 2025 Form 10-K were reported. The filing nevertheless identifies ongoing exposure to residential repair and remodel activity, tariffs, materials availability, international operations, cybersecurity and information systems risks.
Management's outlook
The 10-Q does not provide numeric EPS or revenue guidance. Management expects approximately $50 million of restructuring charges for full-year 2026 and anticipates using approximately $1.0 billion of cash, including term-loan proceeds, for 2026 share repurchases. Prior outlook was raised in the October 28, 2026 earnings release, but the 10-Q does not restate that guidance.
Earlier filings 4
10-Q · April 22, 2026
Masco posted a quarter with top-line and EPS beats: net sales rose to $1,918 million (up 6% YoY; +4% ex-currency) and diluted net income per share was $1.05 (vs $0.87). Operating profit improved to $316 million (up 10%)…
10-Q · April 24, 2024
Masco reported Q1 net sales of $1,926 million, down $53 million (≈3%) year-over-year, while gross margin expanded to 35.6% (up 180 bps) and diluted EPS improved to $0.97 (up $0.07). Operating profit was $318 million (up…
10-K · February 8, 2024
Masco reported FY2023 net sales of $7,967 million, down 8% from 2022, driven by an 11% decline in sales volume, but delivered margin expansion (gross margin 35.6%, operating margin 16.9%) and strong cash generation…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.