RPM International (RPM) Misses Q2 EPS by 4c, Revenue Beats

January 5, 2022 6:46 AM EST

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RPM International (NYSE: RPM) reported Q2 EPS of $0.79, $0.04 worse than the analyst estimate of $0.83. Revenue for the quarter came in at $1.64 billion versus the consensus estimate of $1.55 billion.

Business Outlook:

Looking toward the fiscal 2022 third quarter, the company expects that the robust demand for its paints, coatings, sealants and other building materials will continue. However, supply chain challenges and raw material shortages have persisted so far in December, further compounded by disruptions from the Covid-19 Omicron variant on RPM’s operations and those of its supplier base. These factors are expected to put pressure on revenues and productivity.

Despite these challenges, RPM expects to generate double-digit consolidated sales growth in the fiscal 2022 third quarter versus last year’s record third-quarter sales, which grew 8.1%. The company anticipates high-double-digit sales growth in its CPG and PCG segments, along with margin accretion. SPG sales are expected to be up low-double digits as compared to last year’s third quarter. The Consumer Group faces a tough comparison to the prior-year period when its sales increased 19.8% and, as a result, its sales are anticipated to increase by low-single digits.

Consolidated adjusted EBIT for the third quarter of fiscal 2022 is expected to decrease 5% to 15% versus the same period last year, when adjusted EBIT was up 29.7%. The company anticipates that earnings will be affected by ongoing raw material, freight and wage inflation, as well as the impact on sales volumes from operational disruptions caused by the surging Omicron variant of Covid-19 and raw material shortages. These challenges will disproportionately impact the Consumer Group. RPM continues to work to offset these challenges by implementing price increases, improving operational efficiencies and bringing on additional manufacturing capacity.

The company remains focused on managing through the challenges stemming from the pandemic, while optimally positioning the business to deliver long-term growth and increased value for its stakeholders.

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

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