Masco Corporation’s MAS adjusted earnings of 32 cents per share in the first quarter of 2016 beat the Zacks Consensus Estimate of 25 cents by 28%. Moreover, adjusted earnings increased 78% year over year driven by strong margins, and an improved selling, general and administrative expense ratio, partially offset by unfavorable foreign currency. Masco’s net sales of $1.72 billion, however, missed the Zacks Consensus Estimate of $1.73 billion by 0.6%. Nevertheless, reported revenues were up 4% from the prior-year quarter owing to sales growth across all segments except Cabinet. In addition, excluding the impact of currency translations, organic revenues jumped 5% year over year. North American sales increased 5% year over year to $1.35 billion driven by growing demand for repair and remodeling and new home construction products in an improving U.S. economy. International sales fell 2% (up 2% in local currency) to $370 million. Margins Adjusted gross profit grew 15% to $570 million. Adjusted gross margin improved 320 basis points (bps) to 33.1%. Adjusted operating profit was $237 million, up 39% from the prior-year quarter. Adjusted operating margin increased 350 bps to 13.8% driven by increased operating leverage and solid cost control. Operating margin increased 420 bps in North America to 16.1% and 50 bps in international markets to 12.7%. As a percentage of net sales, selling, general and administrative expenses improved 20 bps to 19.4%. Segmental Analysis Cabinets and Related Products: Segment revenues of $236 million declined 5% year over year as strong dealer sales were completely offset by the exit of some less profitable direct-to-builder business. The company reported adjusted operating profit of $25 million driven by higher operating efficiencies, a favorable mix and improved pricing. In the year-ago quarter, it had incurred an operating loss of $2 million. Adjusted operating margin was 10.6% in the quarter, a complete turnaround from (0.8%) reported a year ago. Plumbing Products: The segment recorded revenues of $813 million, up 2%. Organic revenues increased 4% driven by growth in the wholesale/ trade channels as well as the international markets. Adjusted operating margin of 16.1% increased 200 bps year over year. Excluding the impact of the Canadian currency, North American sales of the segment increased 5%. International sales increased 3% in local currency. Decorative Architectural Products: Segment revenues of $493 million were up 9% from the prior-year quarter, driven by strong demand of Core DIY, Behr Pro and Builder’s Hardware. Operating margin increased 290 bps to 21.3% driven by operating leverage and cost productivity. Windows and Other Specialty Products: Segment revenues were $178 million, up 9% year over year driven by a favorable price /commodity mix and volume increase. Organic revenues increased 11%, owing to strong performance of North American windows business. Operating margin was 1.7%, down 200 bps, owing to an increase in ERP expense and labor related expenses. Outlook Masco expects stronger demand for its leading products in 2016. The company currently carries a Zacks Rank #2 (Buy). Key Picks from the Sector Some stocks worth considering in the construction sector include Simpson Manufacturing Co., Inc. SSD, Headwaters Incorporated HW and Gibraltar Industries, Inc. ROCK. All the three companies sport a Zacks Rank #1 (Strong Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MASCO (MAS): Free Stock Analysis Report HEADWATERS INC (HW): Free Stock Analysis Report SIMPSON MFG INC (SSD): Free Stock Analysis Report GIBRALTAR INDUS (ROCK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research