RPM International Q2 Profit Up 53%, Beats View; Again Lifts 2014 Outlook

(RTTNews) - Specialty chemical products company RPM International Inc. (RPM) on Wednesday reported a 53 percent increase in profit for the second quarter from last year, driven by volume increases in both its industrial as well as consumer segments and improved operating margins at most of its business units.

Adjusted earnings per share for the quarter beat analysts' expectations, while revenues came in slightly below their estimates. Looking ahead, the company once again raised its earnings outlook for fiscal 2014.

Consumer segment sales for the second quarter rose 11 percent from the prior-year period to $362.8 million. Organic sales growth was 9.5 percent, principally driven by volume, with foreign exchange losses of 0.6 percent and acquisition growth of 1.7 percent.

Industrial segment net sales increased 3 percent to $708.7 million, with 2.2 percent increase in organic sales. This was offset by 0.9 percent in foreign exchange losses, while acquisitions added 0.4 percent.

RPM International's net income for the second quarter was $63.6 million or $0.48 per share, up from $41.7 million or $0.31 per share in the year-ago period.

During the prior-year period, the company incurred a one-time, non-cash charge of $10.8 million or $0.09 per share for the write-down of its remaining equity investment in Kemrock Industries and Exports Limited in India.

Excluding this, adjusted net income for the prior-year quarter was $52.5 million or $0.40 per share. On average, eleven analysts polled by Thomson Reuters expected the company to report earnings of $0.45 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 5 percent to $1.07 billion from $1.02 billion in the previous-year quarter. Analysts had a consensus revenue estimate of $1.08 billion.

Looking ahead to fiscal 2014, RPM International now forecasts earnings in a range of $2.05 to $2.10 per share, up from the prior range of $2.00 to $2.07 per share. The company expects 5 percent to 7 percent consolidated net sales growth for the full year.

Analysts expect the company to report earnings of $2.09 per share for the year on revenues of $4.37 billion.

Frank Sullivan, Chairman and Chief Executive Officer of RPM International said, "Due to the continued improvement in the U.S. residential housing market, combined with the impact of prior-year acquisitions and the continued success of new product introductions, we now anticipate our full-year consumer segment sales growth to be 8% to 10%. This is an increase over last quarter's consumer segment guidance of 6% to 8%."

Sullivan added, "We continue to expect 4% to 6% sales growth in our industrial segment and 5% to 7% consolidated net sales growth for the full year."

In Wednesday's regular trading session, RPM is trading at $42.12, up $0.65 or 1.57 percent on a volume of 91,404 shares.