UPDATE 4-Sherwin-Williams sees strong Q2, shares touch life-high

* Q1 adj EPS $0.40 in line with market estimates * Q1 sales of $1.57 bln slightly ahead of estimates * Sees Q2 EPS $1.55-$1.70 vs est $1.49 * Sees mid-to-high single-digit rise in Q2 sales

* Shares jump 5 pct, touch life high (Recasts; adds call details, updates share movement)

BANGALORE, April 22 (Reuters) - Sherwin-Williams Co (SHW.N) painted a pretty picture for the second quarter, projecting a profit above market expectations on accelerating sales growth, sending its shares up 5 percent to a lifetime high.

The largest U.S. paint maker said the current year began slowly with sales lagging expectations.

But in March "the storm clouds parted both literally and figuratively" and the pace of business improved, Chief Executive Christopher Connor said on a conference call with analysts.

The U.S. housing market is showing signs of stabilizing after its deepest plunge since the Great Depression, though a rapid recovery is still seen unlikely with unemployment hovering just below 10 percent.

"The sales momentum we saw in March was absolutely encouraging and the fact it appears to be carrying over that April is even more encouraging," Connor said.

He added the company saw some improvement in new residential business for the first time in many years.

Sherwin-Williams, which also posted a first-quarter profit in line with Wall Street estimates, expects a mid-to-high single-digit percent rise in sales for the second quarter.

According to Thomson Reuters I/B/E/S, analysts on average were expecting sales of about $2 billion, which translates to a 3 percent increase from last year.

Sherwin-Williams, which is the world's no. 2 paint maker behind Dutch company Akzo Nobel (AKZO.AS), projected second-quarter earnings of $1.55 a share to $1.70 a share, above analysts expectations of $1.49 a share.

Sales at Sherwin-Williams, which operates more than 3,500 stores, benefitted from favorable translation rate changes partially offsetting a decline in domestic paint sales volume during the first quarter.

However, CEO Connor warned that domestic demand remains soft, even as first-quarter sales rose to edge past market estimates.

He also said cost pressure caused by the tight supply of raw materials is not likely to abate until the second half of the year.

"If there's a downside to the strengthening industry demand it's that it will likely keep pressure on the raw material supply chain," he said.

The company, which caters to do-it-yourself customers, contractors, and multi-national industrial manufacturers, had predicted the coatings industry would see annual raw material price inflation in low-to-mid single digits this year.

But the maker of Dutch Boy, Krylon and Duron paints now expects a mid-to-high single-digit percent rise in price inflation.

For the first quarter, net income was $32.6 million, or 30 cents a share. Excluding a one-time increase in income tax expense, Sherwin-Williams earned 40 cents a share, matching the mean Wall Street estimates.

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Shares of the Cleveland, Ohio-based company, which have risen 33 percent over the past year as residential and commercial construction markets recovered, were up 4 percent at $77.25 in morning trade Thursday on the New York Stock Exchange.

They touched a lifetime high of $77.64 earlier in the session. (Reporting by Viraj Nair in Bangalore; Editing by Don Sebastian, Maju Samuel)