Masco Paints a Dour Housing Picture

TAYLOR, MICH. (TheStreet) -- Home improvement and building-products maker Masco(MAS Quote) is not so confident that the housing market is poised for a turnaround.

The company posted a 33% drop in second-quarter earnings on Monday, and said it still expects to record a full-year loss.

Nonetheless, investors, still excited over better-than-expected new home sales, sent shares of the company up 5% to $11.59 in afternoon trading.

During the quarter, Masco earned $63 million, or 15 cents a share, compared with $94 million, or 23 cents a share, in the year-ago period. Analysts expected a profit of 1 cent a share.

The company's sales fell 23% to $2 million from $2.6 million last year. In North America sales sank 21%, while international sales plunged 30%.

The company attributed the decline to "significantly lower sales volume of new home construction products and services, as well as a continued decline in consumer spending for home improvement products in both North American and international markets, as well as a less favorable product mix."

But Masco did see higher sales in paints and stains, a trend also being acknowledged by home improvement retailers like Home Depot (HD Quote) and Lowe's(LOW Quote). It seems while consumers are not quite willing to undertake major household renovations, they are finding smaller ways to spruce up their homes.

You know, throw a little paint on it. It'll be fine.

Looking ahead, Masco predicts that 2009 housing starts will fall 40% to 550,000 units as consumer spending for home improvement products both in the states and abroad will continue at depressed levels in the near-term.