TAYLOR, MICH. ( TheStreet) -- Home improvement and building-products maker Masco ( MAS) 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) and Lowe's ( LOW). 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.
On that note, Masco expects to a record a loss between 5 cents and 25 cents in 2009, but this is slightly better than prior forecast of a loss between 15 cents and 35 cents. Housing data released earlier today painted a rosier picture. New home sales grew 11% in June, their strongest pace since November 2008. --Jeanine Poggi reported this story from New York.