Sherwin-Williams 3Q net income up but shares fall

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CLEVELAND (AP) -- The Sherwin-Williams Co. said its third-quarter net income rose 31 percent as improving sales at its paint stores offset weakness in other areas.

But the stock dropped 5 percent as investors fretted about the company's ability to overcome higher raw material costs and soft demand.

The company earned $235 million, or $2.24 per share, compared with $179.9 million, or $1.71 per share, a year earlier. A hit from currency exchange impacted the most recent quarter by 5 cents per share.

Revenue rose 5 percent to $2.6 billion from $2.48 billion a year ago.

Analysts surveyed by FactSet expected earnings of $2.21 per share on revenue of $2.67 billion.

The company said sales at its paint stores rose 10 percent to $1.55 billion in the quarter due to both higher volume and prices. Sales in its consumer unit and its finished group both fell 1 percent. Costs rose slightly as the company continued to battle with higher prices of raw materials.

For the fourth quarter, the company expects to earn between 98 cents and $1.18 per share. Analysts expect $1.08 per share.

For all of 2012, it forecasts earnings $6.35 to $6.55 per share, up 15 cents per share from its prediction three months ago. Analysts expect $6.43.

Shares lost 5.1 percent, or $7.76 to $144 in afternoon trading. The stock traded at a 52-week high of $156.50 earlier this month. It traded as low as $80.28 last November.