RPM International (RPM) to Post Q1 Earnings: Factors to Note

RPM International Inc. RPM is slated to report first-quarter fiscal 2024 results (ended Aug 31) on Oct 4, before the opening bell.

In the last reported quarter, the company’s earnings and net sales beat the Zacks Consensus Estimate by 5.4% and 2%, respectively. On a year-over-year basis, earnings decreased by 4.2% but increased by 1.6%.

The Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has moved up to $1.56 per share from $1.54 over the past 60 days. The estimated value indicates a 6.1% increase from the year-ago earnings of $1.47 per share. The consensus mark for revenues is $1.96 billion, suggesting a 1.6% year-over-year improvement.

RPM International Inc. Price and EPS Surprise


RPM International Inc. Price and EPS Surprise

RPM International Inc. price-eps-surprise | RPM International Inc. Quote


Factors to Consider

RPM’s fiscal first-quarter net sales are likely to have increased from the prior year’s levels on higher contributions from the Performance Coatings Group (PCG), Construction Products Group (CPG) and Consumer Group (CG) segments. Strong pricing and MAP 2025 benefits are added positives.

For fiscal first-quarter, RPM expects total net sales to increase in the low-single-digit range year over year.

PCG sales are anticipated to increase in the mid-single digit, driven by strength in energy markets, reshoring manufacturing to the United States and government infrastructure spending.

The company expects sales to rise at CPG in the low-single digits. This is mainly backed by continued share gains in concrete admixtures, and strong roofing and stabilization in the residential sector. Also, its focus on reshoring infrastructure as well as on building maintenance and restoration bode well.

Specialty Products Group (SPG) revenues are expected to decline high-single digit year over year, due to destocking and stabilized demand.

CG sales are likely to be up in the low-single digit driven by higher pricing and stabilized volume.

Overall, increased public sector spending, its turn-key service model and its focus on renovations are likely to have aided the company’s top line in the quarter. Prudent cost management and higher pricing are likely to partly offset the ongoing inflationary pressures and the challenging housing market.

RPM expects customer destocking, internal inventory normalization moves and inflation to impact performance in the to-be-reported quarter. Also, a strengthening U.S. dollar remains a headwind for the fiscal first quarter.

RPM anticipates its fiscal first quarter’s adjusted EBIT to be in high single-digit range.

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for RPM International this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.

Earnings ESP: Its earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With the Favorable Combination

According to our model, here are some companies in the broader construction sector that have the right combination of elements to post an earnings beat in the quarter to be reported.

Acuity Brands, Inc. AYI has an Earnings ESP of +4.35% and a Zacks Rank #3.

AYI’s earnings topped the consensus mark in each of the last four quarters, the average being 13.7%. Earnings for the to-be-reported quarter are expected to fall 9.6% year over year.

Dycom Industries, Inc. DY has an Earnings ESP of +0.99% and a Zacks Rank #3.

DY’s earnings topped the consensus mark in all of the trailing four quarters, the average surprise being 147.4%. Earnings for the to-be-reported quarter are expected to grow 4.1% year over year.

EMCOR Group, Inc. EME has an Earnings ESP of +1.11% and a Zacks Rank #2.

EME’s earnings topped the consensus mark in all the last four quarters, the average being 17.2%. Earnings for the to-be-reported quarter are expected to grow 25.5% year over year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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