RPM International quarterly earnings exceed expectations, stock price surges nearly 10%

Medina, Ohio — On Wednesday, RPM International Inc. (NYSE:RPM) reported third-quarter adjusted earnings per share of $0.57, significantly above analysts’ broad expectations of $0.35, by $0.22, for a 62.9% increase. Revenue reached a record $1.61 billion, exceeding the $1.55 billion expected, up 8.9% from $1.48 billion in the year-ago quarter.

After the earnings report was released, the company’s share price surged 9.61% in premarket trading.

The specialty coatings and building materials company attributed its strong performance to increased sales of high-performance building solutions, acquisitions, and operational improvements driven by its MAP plan.

Sales growth included 3.0% organic growth, 3.5% from acquisitions, and 2.4% from foreign exchange translation gains.

RPM Chairman and CEO Frank C. Sullivan said: “I’m proud of our record third-quarter performance. In a period of market volatility, we leveraged our competitive advantages, flexibly focused on growth-oriented end markets, and delivered unit growth and record sales.”

Adjusted earnings before interest and taxes (EBIT) reached a record $116.4 million, up 48.8% from $78.2 million in the prior-year quarter, primarily driven by higher sales and improved fixed-cost leverage.

The company excluded $22.1 million of pre-tax charges from its adjusted results. These charges were related to actions to optimize spending focused on selling and administrative expenses.

For the fourth quarter, RPM reiterated its guidance, expecting sales to achieve low single-digit growth, with adjusted EBIT to grow low single digits to high single digits compared with the prior year’s record performance.

Despite a more challenging year-over-year comparison base and geopolitical uncertainty in the Middle East, management expressed confidence in delivering a record fourth-quarter performance.

This quarter, all three business segments achieved record sales and improved profitability.

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