Yahoo Finance RPM International (RPM) to Post Q3 Earnings: What's in Store?
RPM International Inc. RPM is slated to report third-quarter fiscal 2023 results on Apr 6, before the opening bell.
In the last reported quarter, the company’s earnings met the Zacks Consensus Estimate and net sales missed the same by 0.9%. On a year-over-year basis, earnings and net sales increased 39.2% and 9.3%, respectively.
The 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 $1.47 billion, suggesting a 2.7% 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 third-quarter net sales are likely to have increased from the prior year’s levels on higher contributions from Performance Coatings Group or PCG and Consumer Group or CG segments.
For third-quarter fiscal 2023, RPM International expects sales to increase in the low to mid-single-digit range year over year.
PCG sales are anticipated to increase in the high-single digit to low-double digit, driven by strength in energy markets, reshoring manufacturing to the United States and government infrastructure spending.
The company expects sales to decline at Construction Products Group or CPG in the low to mid-single digits. Commercial and infrastructure construction activity is likely to remain positive and pricing management will contribute to growth. However, the segment is expected to be weighed down by a weak European economy and softening construction activity.
Specialty Products Group or SPG revenues are expected to remain flat year over year, benefiting from continued benefits from MAP 2025 initiatives. CG sales are likely to be up in the mid-single digit driven by higher pricing. However, it expects that the low levels of housing turnover will have a negative impact on Consumer volumes.
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 challenging housing market partly.
The Zacks Consensus Estimate for CPG net sales of $466 million suggests a 3.3% decrease from the year-ago period. The same for PCG sales are likely to grow 10% to $298 million from the year ago.
The consensus estimate for CG net sales of $518 million suggests a 5.3% increase from a year ago. The same for SPG sales are likely to increase 0.5% to $190 million from a year ago.
RPM intends to increase prices for certain raw materials, labor and packaging to forgo unprecedented supply-chain and inflationary woes. Higher costs from unreliable bulk transportation (which creates production inefficiencies) and fuel surcharges (driven by high energy prices) are expected to have affected the CG segment. Also, a strengthening U.S. dollar remains a headwind for the fiscal third quarter.
RPM anticipates the fiscal third quarter’s adjusted EBIT to be between $75 million and $85 million. In the year-ago period, it was $80.6 million.
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. 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 Favorable Combination
According to our model, here are some companies that have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Acuity Brands, Inc. AYI has an Earnings ESP of +7.38% and a Zacks Rank #2.
AYI’s earnings topped the consensus mark in all the last four quarters, with the average being surprise being 15%. Earnings for the to-be-reported quarter are expected to decline 1.2% year over year.
Latham Group, Inc. SWIM has an Earnings ESP of +8.70% and a Zacks Rank #3.
SWIM’s earnings missed the consensus mark in all the trailing four quarters, with the average negative surprise being 91.8%. The company is expected to report a loss of 8 cents per share in the to-be-reported quarter.
American Eagle Outfitters AEO has an Earnings ESP of +0.11% and a Zacks Rank #3.
AEO’s earnings topped the consensus mark in two of the last four quarters and missed on two occasions, with the average being 0.9%. Earnings for the to-be-reported quarter are expected to remain flat year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
RPM International Inc. (RPM) : Free Stock Analysis Report
Acuity Brands Inc (AYI) : Free Stock Analysis Report
Latham Group, Inc. (SWIM) : Free Stock Analysis Report
