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What You Should Expect From RPM International's Q2 Earnings?

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Key Takeaways

  • RPM's adjusted EPS estimate for Q2 edged lower recently, while net sales are still expected to rise YoY.
  • RPM expects Q2 sales growth across CPG, PCG and Consumer, supported by demand trends and recent acquisitions.
  • RPM expects MAP 2025 initiatives to support margins, contributing to year-over-year growth in adjusted EBIT.

RPM International Inc. ((RPM - Free Report) ) is slated to report its second-quarter fiscal 2026 results on Jan. 8, before the opening bell.

In the last reported quarter, RPM’s adjusted earnings per share (EPS) and net sales topped the Zacks Consensus Estimate by 0.5% and 3.4%, respectively. Both metrics grew year over year by 2.2% and 7.4%, respectively.

The company’s earnings topped analysts’ expectations in three of the trailing four quarters and missed on the remaining occasion, with the negative average surprise being 5.4%.

How Are Estimates Placed for RPM Stock?

The Zacks Consensus Estimate for the fiscal second quarter’s adjusted EPS has declined in the past 30 days to $1.42 per share from $1.43. The revised estimated figure indicates 2.2% growth from the year-ago figure of $1.39 per share.

RPM International Inc. Price and EPS Surprise

RPM International Inc. Price and EPS Surprise

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

The consensus mark for net sales is pegged at $1.93 billion, indicating 4.7% year-over-year growth.

Factors Likely to Shape RPM’s Q2 Results

Net Sales

RPM International's fiscal second-quarter net sales are likely to have increased year over year on the back of higher contributions from all its reportable segments — Construction Products Group (“CPG”), Performance Coatings Group (“PCG”) and Consumer Group. The growth is expected to have been driven by stronger sales of systems and turnkey solutions for construction projects with demanding specifications, along with continued demand for products and services tied to maintenance and repair activities.

Acquisitions are also expected to have supported the top line during the quarter. The additions of The Pink Stuff and Ready Seal are likely to have provided incremental revenue benefits. Management expects consolidated net sales to increase at a mid-single-digit rate year over year in the fiscal second quarter. By segment, the Consumer Group is expected to have grown sales moderately more than PCG and CPG due to acquisitions.

Our model predicts CPG (which contributed 41.7% to the first quarter of fiscal 2026 net sales) sales to grow 4.3% year over year to $757.3 million. We expect net sales in the Consumer Group (32.8%) and PCG (25.5%) segments to increase year over year by 5.9% and 5%, respectively.

As part of the restructuring actions and its MAP 2025 initiative, the company has segregated the Specialty Products Group business among its other three reportable segments. RPM expects that this strategic move will enable it to collaborate more closely to fuel revenue growth and profitability in the future.

However, some challenges are likely to have persisted during the quarter. Economic uncertainty, tariff-related inflation and subdued consumer confidence remain concerns. Temporary inefficiencies from plant consolidations and higher interest expense are also expected to have weighed on results.

Margins & Earnings

In the fiscal second quarter, RPM’s bottom line is expected to have gained on the back of its MAP 2025 initiatives, resulting in incremental savings in procurement, manufacturing and commercial excellence. Moreover, reduced advertising costs, insurance costs and decreased bonus expenses are expected to have aided the bottom line.

The company expects adjusted EBIT to be up year over year in the mid-single-digit percentage range. Our model predicts the metric to be up 5.9% year over year to $319.4 million.

What Our Model Indicates for RPM

Our proven model does not conclusively predict an earnings beat for RPM International this time around. 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. This is not the case here, as you will see below.

Earnings ESP: The company’s earnings ESP is -1.31%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: RPM currently carries a Zacks Rank of 4 (Sell).

Stocks With the Favorable Combinations

According to our model, the following companies in the broader Basic Materials sector possess the right combination of elements to post an earnings beat in the upcoming quarter.

Agnico Eagle Mines ((AEM - Free Report) ) currently has an Earnings ESP of +29.54% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle reported better-than-expected earnings in all of the trailing four quarters, the average surprise being 11.6%. Earnings for Agnico Eagle’s to-be-reported quarter are expected to grow 69.8% year over year.

Coeur Mining ((CDE - Free Report) ) currently has an Earnings ESP of +7.86% and a Zacks Rank of 1.

Coeur Mining reported better-than-expected earnings in two of the trailing four quarters and missed on the remaining two occasions, the average surprise being 106.6%. Earnings for Coeur Mining’s to-be-reported quarter are expected to grow 172.7% year over year.

Element Solutions ((ESI - Free Report) ) has an Earnings ESP of +1.12% and a Zacks Rank of 3 at present.

Element Solutions reported better-than-expected earnings in all of the trailing four quarters, the average surprise being 2.7%. Earnings for Element Solutions’ to-be-reported quarter are expected to grow 2.9% year over year.

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