Sherwin Williams Co (SHW) - Get Report cut its full year earnings guidance by more than $1 after the company said its $9.3 billion takeover of fellow paint-maker Valspar is going to be six times costlier than first expected, the Wall Street Journal reported.
Sherwin Williams expects annual earnings of $12.30 to $12.70 a share, down from $13.65 to $13.85 forecast in April. FactSet analysts forecasted earnings of $14.05 to $14.25.
The company will incur a $2.40 per-share charge for the year related to the Valspar deal instead of the previously anticipated 40-cent per-share charge. The new cost estimate is three times the expected gain from the acquisition. Sherwin Williams hoped to capitalize on Valspar's strength in retailers like Lowe's (LOW) - Get Report , as Sherwin Williams typically relies heavily on its own stores for sales.
Sherwin Williams stock tumbled over 2% by mid-afternoon.
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