RPM International (RPM) Tops Q3 EPS by 12c, Updates Outlook

RPM International (NYSE: RPM) reported Q3 EPS of $0.30, $0.12 better than the analyst estimate of $0.18. Revenue for the quarter came in at $1.1 billion versus the consensus estimate of $1.09 billion.

• includes non-recurring $0.01 per share net tax benefit with the enactment of tax reform and an additional $0.08 per share benefit from lower corporate tax rate that was previously included in the company’s earnings guidance

Business Outlook

“On a consolidated basis in the fourth quarter, we expect RPM to generate mid-to-upper-single-digit sales growth that will drive double-digit EBIT growth, reflecting continued tight SG&A spending controls, despite the challenging higher raw material environment. Overall, these anticipated results are consistent with what we communicated back in January,” stated Sullivan.

“As for the performance of our segments in the fourth quarter, we expect sales growth in our industrial segment in the mid- to upper-single digits, driven by continued strong performance in our Tremco Roofing liquid applied products, as well as favorable foreign currency translation. For our consumer segment, we expect sales growth in the mid-single-digit range and for the specialty segment, sales growth in the low-single-digit range,” Sullivan stated.

The company currently expects its income tax rate to be in the 26% to 27% range in the fourth quarter of fiscal 2018, which includes the lower U.S. statutory income tax rate. The company noted its tax rate could change as the IRS continues to issue guidance on the new tax law.

“We are narrowing our fiscal 2018 earnings guidance upwards to a range of $3.05 to $3.10 per diluted share from our previous guidance of $3.00 to $3.10 per diluted share, reflecting our expectation of a continuation of solid top-line sales and double-digit EBIT growth,” stated Sullivan.

(Street sees FY EPS of $3.02)

For earnings history and earnings-related data on RPM International (RPM) click here.

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