We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 8.1% but sales topped the same by 3.9%. On a year-over-year basis, earnings decreased 25.5% but net sales increased 10.3%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has been unchanged at 30 cents per share over the past 60 days. The estimated value indicates a 21.1% decrease from the year-ago earnings of 38 cents per share. The consensus mark for revenues is $1.41 billion, suggesting an 11.1% year-over-year improvement.
For the quarter to be reported, RPM International — which is a specialty chemicals manufacturer — anticipates sales to increase in double digits from third-quarter fiscal 2021. It anticipates Construction Products Group and Performance Coatings Group units to witness sales growth in double digits. The Specialty Products Group is expected to witness sales growth in low-double digits. Yet, the company expects Consumer Group to witness low-single-digit sales growth, given a tough year-over-year comparison.
RPM remains focused on prudent strategic growth investments that have been improving resiliency, capacity and efficiency. Again, excellent momentum in the MAP to Growth program also added to the positives.
Yet, the company has been facing the wrath of unprecedented supply-chain disruptions and raw materials, packaging-related inflation. It has also been witnessing additional overhead expenses resulting from the ongoing investments in capacity. This is anticipated to have put pressure on the bottom line.
Importantly, rapidly escalating material costs and insufficient supply of raw materials have been compressing margins. Raw material inflation is expected to have impacted its bottom-line performance. Also, costs of transportation such as rail, over-the-road, truck and ocean freight may have been headwinds.
The company expects adjusted EBIT for third-quarter fiscal 2022 to decline 5-15% from the year-ago period.
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 #4 (Sell).
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 their respective quarters to be reported.
Acuity Brands, Inc. (AYI - Free Report) has an Earnings ESP of +3.03% and a Zacks Rank #2.
Earnings for the second quarter of fiscal 2022 are expected to increase 9% year over year. Earnings estimates have increased to $2.31 per share from $2.25 over the past seven days.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +7.64% and a Zacks Rank #3.
Earnings for the first quarter of 2022 are expected to increase 20.8% year over year. Earnings estimates have increased to 58 cents per share from 57 cents over the past 30 days.
Quanta Services, Inc. (PWR - Free Report) has an Earnings ESP of +4.22% and a Zacks Rank #3.
Earnings for the first quarter of 2022 are expected to increase 62.7% year over year. Earnings estimates have increased to $1.35 per share from $1.33 over the past 30 days.
Image: Bigstock
Supply-Chain Woes to Hurt RPM International (RPM) Q3 Earnings
RPM International Inc. (RPM - Free Report) is scheduled to report third-quarter fiscal 2022 results (ended Feb 28) on Apr 6, before the opening bell.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 8.1% but sales topped the same by 3.9%. On a year-over-year basis, earnings decreased 25.5% but net sales increased 10.3%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has been unchanged at 30 cents per share over the past 60 days. The estimated value indicates a 21.1% decrease from the year-ago earnings of 38 cents per share. The consensus mark for revenues is $1.41 billion, suggesting an 11.1% year-over-year improvement.
RPM International Inc. Price and EPS Surprise
RPM International Inc. price-eps-surprise | RPM International Inc. Quote
Factors to Consider
For the quarter to be reported, RPM International — which is a specialty chemicals manufacturer — anticipates sales to increase in double digits from third-quarter fiscal 2021. It anticipates Construction Products Group and Performance Coatings Group units to witness sales growth in double digits. The Specialty Products Group is expected to witness sales growth in low-double digits. Yet, the company expects Consumer Group to witness low-single-digit sales growth, given a tough year-over-year comparison.
RPM remains focused on prudent strategic growth investments that have been improving resiliency, capacity and efficiency. Again, excellent momentum in the MAP to Growth program also added to the positives.
Yet, the company has been facing the wrath of unprecedented supply-chain disruptions and raw materials, packaging-related inflation. It has also been witnessing additional overhead expenses resulting from the ongoing investments in capacity. This is anticipated to have put pressure on the bottom line.
Importantly, rapidly escalating material costs and insufficient supply of raw materials have been compressing margins. Raw material inflation is expected to have impacted its bottom-line performance. Also, costs of transportation such as rail, over-the-road, truck and ocean freight may have been headwinds.
The company expects adjusted EBIT for third-quarter fiscal 2022 to decline 5-15% from the year-ago period.
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 #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With 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 their respective quarters to be reported.
Acuity Brands, Inc. (AYI - Free Report) has an Earnings ESP of +3.03% and a Zacks Rank #2.
Earnings for the second quarter of fiscal 2022 are expected to increase 9% year over year. Earnings estimates have increased to $2.31 per share from $2.25 over the past seven days.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +7.64% and a Zacks Rank #3.
Earnings for the first quarter of 2022 are expected to increase 20.8% year over year. Earnings estimates have increased to 58 cents per share from 57 cents over the past 30 days.
Quanta Services, Inc. (PWR - Free Report) has an Earnings ESP of +4.22% and a Zacks Rank #3.
Earnings for the first quarter of 2022 are expected to increase 62.7% year over year. Earnings estimates have increased to $1.35 per share from $1.33 over the past 30 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.