Cleveland Sherwin-Williams reported that its first quarter earnings dropped 13%, dragged down by weak paint sales, higher raw material costs and the new healthcare overhaul passed by Congress.
Sherwin-Williams earned $32.6 million for the quarter ended March 31, compared with profit of $37.3 million in the year-ago quarter. Revenue rose 1% to $1.6 billion in the quarter from $1.5 billion.
Sherwin-Williams and other companies receive a government subsidy to keep prescription drug benefits for retirees. They have been able to deduct their expenses, but that ends in 2013 under the recently passed legislation.
Companies are announcing the charges now because accounting rules say they must book them during the period a new law is enacted.