Sherwin-Williams Covposted a quarterly profit that beat Wall Street estimates on lower interest expense and cost savings, but shares fell 6 percent on the paint maker's disappointing fourth-quarter earnings outlook.

Sherwin-Williams, which caters to do-it-yourself (DIY) customers, contractors, and multi-national industrial manufacturers, said it expects commercial construction market to remain weak till the first-half of next year.

Significant challenges remain in both the residential and commercial real estate markets and strong, sustained growth in coatings demand will come only after these challenges are resolved, a company executive said on a call.

The company, which plans to open about 15 stores in new markets this year, said there was a possibility that raw material costs could rise slightly in 2010.

For the fourth quarter, Sherwin Williams, the maker of Dutch Boy, Krylon and Duron paints, sees a profit of 35 cents to 55 cents a share. It expects sales to fall 8 percent to 12 percent in the quarter.

Analysts on average were expecting the company to earn 61 cents a share, before items, according to Thomson Reuters I/B/E/S.

Cleveland, Ohio-based Sherwin, however, tightened its 2009 projected earnings to a range of $3.52 a share to $3.72 a share. It had previously forecast a range of $3.30 to $3.80 a share.

The company expects revenue to fall 11.5 percent to 12.5 percent in 2009.

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For the latest quarter ended Sept. 30, the company earned $175.2 million, or $1.51 a share, compared with $177.1 million, or $1.50 a share, a year ago.

Revenue fell 12 percent to $2 billion, hurt primarily by weak paint sales volume.

Analysts were expecting the company to earn $1.35 a share on revenue of $2.01 billion.

Gross margin rose 420 basis points to 46.5 percent of sales in the quarter helped by lower year-over-year raw material costs, lower freight and distribution expenses and higher year-over-year selling prices. Interest expense fell 44 percent to $8.4 million in the quarter.

Shares of the company fell $3.76 to $59.31 Tuesday afternoon on the New York Stock Exchange. They touched a low of $59.11 earlier in the session. (Reporting by Renju Jose; Editing by Anil D'Silva)

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