MEDINA, Ohio - RPM International Inc. (NYSE: NYSE:RPM), a leader in specialty coatings, sealants, and building materials, reported a slight beat on third-quarter earnings but missed revenue expectations, causing its shares to fall by 4.63%. The company posted adjusted earnings per share (EPS) of $0.52, which was $0.06 higher than the analyst estimate of $0.46. However, revenue for the quarter was $1.52 billion, falling short of the consensus estimate of $1.53 billion.
Despite the revenue shortfall, RPM achieved record third-quarter net sales, which were up 0.4% from the previous year. The company also reported record net income of $61.2 million, record diluted EPS of $0.47, and record earnings before interest and taxes (EBIT) of $93.4 million. Adjusted diluted EPS saw a significant increase of 40.5% over the prior year, and adjusted EBIT rose by 31.3% to $110.1 million.
RPM's chairman and CEO, Frank C. Sullivan, attributed the strong performance to the company's strategic balance, focus on repair and maintenance, and the successful implementation of MAP 2025 operating improvement initiatives, which have driven structural financial improvements and increased collaboration across RPM's businesses. These initiatives also contributed to the fourth consecutive quarter of record cash flow from operating activities, totaling $1.26 billion over the trailing 12 months.
Looking ahead, RPM provided guidance for the fiscal 2024 fourth quarter, expecting consolidated sales to be approximately flat compared to the prior year's record results and forecasting high-single-digit percentage growth in consolidated adjusted EBIT. For the full fiscal year 2024, the company anticipates consolidated sales to increase near the midpoint of the previous outlook of low-single-digit percentage growth and adjusted EBIT to rise near the midpoint of the previous outlook of low-double-digit to mid-teen percentage growth.
While RPM's strategic balance and MAP 2025 initiatives are expected to drive margin improvements, the company acknowledged mixed economic conditions, with volume growth in Performance Coatings Group and Construction Products Group offset by continued softness in DIY end markets and a decline in Specialty Products Group sales. Sullivan expressed confidence in RPM's positioning for accelerated growth once end markets recover, emphasizing the long-term benefits of the company's margin achievement initiatives.
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