Building-Products Firms Are Faring Well --- Quarterly Earnings Again Are Strong, Analysts Say
Limited international exposure and continued strong end markets helped U.S. building-products companies continue their streak of strong earnings in the third quarter.</br></br>Except for company-specific problems at paint and coatings provider Sherwin Williams Co. and tool maker Stanley Works, analysts say they see little bad news coming out of the sector. They said the moderate inventory correction in retail home-center distribution channels was a second-quarter phenomenon.</br></br>"Although there are some individual cases where they're not, most of these companies are hitting on all cylinders," said analyst Peter Dannenbaum of Morgan Stanley Dean Witter.</br></br>While the Asian turmoil has hurt U.S. companies in other sectors, many building-products companies have little or no exposure to that region and so are immune from some global pressures. In addition, the companies don't have negative currency translations and few exports, said analyst Jonathan Goldfarb of Merrill Lynch & Co.</br></br>"All those global forces that are causing big earnings shortfalls don't affect them, so the earnings trends are especially strong," he said.