RPM International (RPM) to Report Q2 Earnings: What to Expect?
RPM International Inc. RPM is slated to report second-quarter fiscal 2024 results on Jan 4, before the opening bell.
In the last reported quarter, the company’s earnings and net sales beat the Zacks Consensus Estimate by 5.1% and 2.5%, respectively. On a year-over-year basis, earnings and net sales increased 11.6% and 4.1%, respectively.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has remained stable at $1.23 per share over the past 60 days. The estimated value indicates an 11.8% increase from the year-ago earnings of $1.10 per share.
RPM International Inc. Price and EPS Surprise
RPM International Inc. price-eps-surprise | RPM International Inc. Quote
The consensus mark for revenues is $1.83 billion, suggesting a 2.2% year-over-year improvement.
Factors to Consider
RPM’s fiscal second-quarter net sales are likely to have increased from the prior year’s levels on higher contributions from the Performance Coatings Group (“PCG”), Construction Products Group (“CPG”) and Consumer Group (“CG”) segments. Strong pricing and MAP 2025 benefits are added positives.
For the fiscal second quarter, RPM expects total net sales to increase in the low-single-digit range year over year.
PCG sales are anticipated to grow, driven by strength in energy markets, reshoring manufacturing to the United States and government infrastructure spending. We expect PCG sales to grow by 5.1% year over year.
CPG is also expected to rise, backed by continued share gains in concrete admixtures, strong roofing and the residential sector’s stabilization. Also, its focus on reshoring infrastructure, building maintenance and restoration bode well. We expect CPG sales to grow by 5.5% year over year.
CG sales are likely to be up in the low-single-digit range, fueled by higher pricing and stabilized volume. Our expectation reflects 1.3% year over year sales growth.
However, Specialty Products Group’s revenues are expected to decline in the high-single-digit range year over year due to destocking and stabilized demand. Our projection depicts 11% year over year decline in sales.
Its increased public sector spending, turn-key service model and focus on renovations are likely to have aided the top line in the quarter under review. Prudent cost management and higher pricing are likely to partly offset the ongoing inflationary pressures and the challenging housing market.
RPM anticipates its fiscal second-quarter adjusted EBIT growth between high-single and low-double digits.
What Our Model Indicates
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. 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 #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With a 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 the quarter to be reported.
Martin Marietta Materials, Inc. MLM has an Earnings ESP of +8.53% and a Zacks Rank #2.
MLM’s earnings topped the consensus mark in each of the last four quarters, the average being 37.3%. Earnings for the to-be-reported quarter are expected to fall 28.3% year over year.
Watsco, Inc. WSO has an Earnings ESP of +7.29% and a Zacks Rank #2.
WSO’s earnings topped the consensus mark in three of the trailing four quarters and missed on one occasion, the average surprise being 5.7%. Earnings for the to-be-reported quarter are expected to grow 8.9% year over year.
Dream Finders Homes Inc. DFH has an Earnings ESP of +7.46% and sports a Zacks Rank #1.
DFH’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, the average being 131.6%. Earnings for the to-be-reported quarter are expected to fall 14.1% year over year.
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Watsco, Inc. (WSO) : Free Stock Analysis Report
Martin Marietta Materials, Inc. (MLM) : Free Stock Analysis Report
RPM International Inc. (RPM) : Free Stock Analysis Report
Dream Finders Homes, Inc. (DFH) : Free Stock Analysis Report
