RPM International Q3 Profit Tops View, But Revenues Miss; Boosts 2014 Outlook

(RTTNews) - Specialty chemical products company RPM International, Inc. (RPM) reported Thursday a profit for the third quarter compared to a loss last year, which was weighed down by charges. Earnings per share for the quarter topped analysts' expectations by three cents, while quarterly revenues missed their estimates. The company also raised its earnings guidance for full-year 2014.

The results also reflected the strong performance by the company's industrial segment that more than offset the weather-related weakness in its consumer segment due to the impact of "polar vortex."

"We are pleased with RPM's third-quarter performance, especially in light of the severe cold weather during the quarter in North America, which had a pronounced effect on our consumer segment and impacted some of our industrial businesses as well," Chairman and CEO Frank Sullivan said.

The Medina, Ohio-based company reported net income of $16.22 million or $0.12 per share for the third quarter, compared to a net loss of $42.36 million or $0.33 per share in the prior-year quarter. The prior year adjusted net income was $8.67 million or $0.07 per share in the year-ago quarter.

On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.09 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter increased 2.3 percent to $863.41 million from $843.74 million in the same quarter last year, but missed seven Wall Street analysts' consensus estimate of $877.67 million.

Net sales for the industrial segment grew 5.3 percent to $560.54 million, while consumer segment net sales decreased 2.7 percent to $302.87 million from the year-ago quarter.

Weather clearly had a dampening effect on our consumer segment in the quarter, but the fundamentals of these businesses remain very strong and the recovery in residential housing is expected to continue," Sullivan stated.

Sullivan added that most sales deferred as a result of weather will be realized over the coming months.

Looking ahead to fiscal 2014, the company raised its earnings guidance to a range of $2.10 to $2.15 per share from the prior forecast in the range of $2.05 to $2.10 per share. Street is currently looking for full-year 2014 earnings of $2.11 per share on annual sales of $4.35 billion.

The company added that it raised the outlook based on stronger than anticipated leverage in our industrial segment, resulting from solid performance in Europe and businesses serving U.S. construction markets.

With total liquidity of the company standing at about $1 billion, the company said it continues its search for strong acquisition candidates that complement its existing product lines and expand its geographic presence.

RPM closed Wednesday's regular trading session at $42.17, unchanged on a volume of 0.64 million shares. In the past 52-week period, the stock has been trading in a range of $29.49 to $43.86.