Masonite International Corp. (NYSE: DOOR) took a big loss today as a result of less than exemplary Q2 results. The company was down up to 24% in early trading Thursday, and continues to amble around that range.
The door manufacturer faced “operating and distributing” deficiencies as well as wage concerns in the Northern Americas, leading to tightly controlled costs. Net income fell to $27 million from a previous $33 million from 2016 Q2. European sales took a hit as a result of falling exchange rates as well as a 3% drop in total company gross profit. Diluted earnings per share were listed at $0.89, compared to $1.06 last year this time.
The impact of softer than expected demand, foreign exchange, and certain plant consolidations resulted in modest net sales growth in the quarter, while the benefit of improved pricing was offset by approximately $4 million of discrete costs related to legal reserves, the resolution of customer claims in the UK and plant transition costs. Operating and distribution inefficiencies remained a challenge and we continue to take the actions we believe are necessary to improve our manufacturing and distribution performance,” said Fred Lynch, President and CEO.
As a result, Masonite rolled back its 2017 outlook to their previous estimates to account for the weak performance in Q2 as well as the expected competitive market in the future.