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In the last reported quarter, the company’s earnings and sales topped the Zacks Consensus Estimate by 26.7% and 1.7%, respectively. On a year-over-year basis, earnings remained at par, but net sales increased 13%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has been unchanged at $1.44 per share over the past 60 days. The estimated value indicates a 12.5% increase from the year-ago earnings of $1.28 per share. The consensus mark for revenues is $1.98 billion, suggesting a 13.3% year-over-year improvement.
RPM’s fiscal fourth-quarter earnings and revenues will likely increase year over year on the back of prudent strategic growth investments, capacity and efficiency. Again, excellent momentum in the 2020 MAP to Growth program is added positive.
RPM International expects net sales to increase in the low teens. It also expects sales growth in the low teens across the operating segments, backed by strategic investments that it is making to capitalize on market opportunities and industry trends.
The Zacks Consensus Estimate for Construction Products Group or CPG net sales of $730 million suggests a 16% increase from a year ago. The same for Performance Coatings Group or PCG sales is likely to rise 15.8% to $328 million from the previous year’s levels.
The consensus estimate for Consumer Group or CG net sales of $691 million suggests a 9.9% increase from a year ago. The same for Specialty Products Group or SPG sales is likely to increase 11.3% to $226 million from a year ago.
Yet, it has been facing the wrath of unprecedented supply-chain disruptions and raw materials and packaging-related inflation. It has also been witnessing additional overhead expenses resulting from the ongoing investments in capacity.
RPM anticipates the fiscal fourth quarter’s adjusted EBIT to increase in the low teens. The company expects ongoing raw material, freight, and wage inflation as well as the impact on sales volumes from disruptions arising due to the Omicron variant and raw material shortages to weigh on fiscal fourth-quarter earnings.
The consensus mark for CPG’s adjusted EBIT is likely to increase 17.8% year over year. The same for PCG’s adjusted EBIT is likely to improve 29.3% from the prior year’s levels. The consensus estimate for CG’s adjusted EBIT is likely to decline 11.3%, while that of SPG is likely to rise 11.5% from the prior year’s tally.
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 -0.52%. 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.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +1.81% and a Zacks Rank #1.
KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 12%. Earnings for the to-be-reported quarter are expected to grow 10.3% year over year.
Armstrong World Industries, Inc. (AWI - Free Report) has an Earnings ESP of +1.02% and a Zacks Rank #3.
AWI’s earnings topped the consensus mark twice but missed the same on the other two occasions, with the average negative surprise being 0.2%. Earnings for the to-be-reported quarter are expected to grow 19% year over year.
Watsco, Inc. (WSO - Free Report) has an Earnings ESP of +3.36% and a Zacks Rank #3.
WSO’s earnings topped the consensus mark in all the last four quarters, with the average being 24.3%. Earnings for the to-be-reported quarter are expected to grow 32.9% year over year.
Image: Bigstock
RPM International (RPM) to Post Q4 Earnings: What to Expect
RPM International Inc. (RPM - Free Report) is scheduled to report fourth-quarter fiscal 2022 results (ended May 31) on Jul 25, before the opening bell.
In the last reported quarter, the company’s earnings and sales topped the Zacks Consensus Estimate by 26.7% and 1.7%, respectively. On a year-over-year basis, earnings remained at par, but net sales increased 13%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has been unchanged at $1.44 per share over the past 60 days. The estimated value indicates a 12.5% increase from the year-ago earnings of $1.28 per share. The consensus mark for revenues is $1.98 billion, suggesting a 13.3% year-over-year improvement.
RPM International Inc. Price and EPS Surprise
RPM International Inc. price-eps-surprise | RPM International Inc. Quote
Factors to Consider
RPM’s fiscal fourth-quarter earnings and revenues will likely increase year over year on the back of prudent strategic growth investments, capacity and efficiency. Again, excellent momentum in the 2020 MAP to Growth program is added positive.
RPM International expects net sales to increase in the low teens. It also expects sales growth in the low teens across the operating segments, backed by strategic investments that it is making to capitalize on market opportunities and industry trends.
The Zacks Consensus Estimate for Construction Products Group or CPG net sales of $730 million suggests a 16% increase from a year ago. The same for Performance Coatings Group or PCG sales is likely to rise 15.8% to $328 million from the previous year’s levels.
The consensus estimate for Consumer Group or CG net sales of $691 million suggests a 9.9% increase from a year ago. The same for Specialty Products Group or SPG sales is likely to increase 11.3% to $226 million from a year ago.
Yet, it has been facing the wrath of unprecedented supply-chain disruptions and raw materials and packaging-related inflation. It has also been witnessing additional overhead expenses resulting from the ongoing investments in capacity.
RPM anticipates the fiscal fourth quarter’s adjusted EBIT to increase in the low teens. The company expects ongoing raw material, freight, and wage inflation as well as the impact on sales volumes from disruptions arising due to the Omicron variant and raw material shortages to weigh on fiscal fourth-quarter earnings.
The consensus mark for CPG’s adjusted EBIT is likely to increase 17.8% year over year. The same for PCG’s adjusted EBIT is likely to improve 29.3% from the prior year’s levels. The consensus estimate for CG’s adjusted EBIT is likely to decline 11.3%, while that of SPG is likely to rise 11.5% from the prior year’s tally.
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 -0.52%. 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.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +1.81% and a Zacks Rank #1.
KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 12%. Earnings for the to-be-reported quarter are expected to grow 10.3% year over year.
Armstrong World Industries, Inc. (AWI - Free Report) has an Earnings ESP of +1.02% and a Zacks Rank #3.
AWI’s earnings topped the consensus mark twice but missed the same on the other two occasions, with the average negative surprise being 0.2%. Earnings for the to-be-reported quarter are expected to grow 19% year over year.
Watsco, Inc. (WSO - Free Report) has an Earnings ESP of +3.36% and a Zacks Rank #3.
WSO’s earnings topped the consensus mark in all the last four quarters, with the average being 24.3%. Earnings for the to-be-reported quarter are expected to grow 32.9% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.