RPM International to Report Q3 Earnings: What to Expect?

RPM International Inc. RPM is slated to report third-quarter fiscal 2025 results on April 8, before the opening bell.See the Zacks Earnings Calendar to stay ahead of market-making news.In the last reported quarter, RPM’s adjusted earnings of $1.39 per share beat the consensus mark by 3% and increased 13.9% from the year-ago period. Net sales of $1.85 billion topped the consensus mark of $1.78 billion by 3.7% and grew 3% from the prior year’s level.The company’s earnings topped analysts’ expectations in three of the trailing four quarters and met on one occasion, with the average surprise being 4%.RPM International Inc. Price and EPS Surprise RPM International Inc. price-eps-surprise | RPM International Inc. QuoteHow Are Estimates Placed for RPM Stock?The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has declined by a penny to 52 cents per share over the past 60 days, a level similar to the year-ago period profit level. The consensus mark for revenues is $1.51 billion, indicating a 0.6% year-over-year decline.Factors to Shape RPM’s Q3 ResultsHistorically, the fiscal third quarter is RPM’s slowest quarter due to lower construction activity during the winter months. The company is navigating a mixed macroeconomic landscape compounded by seasonal weakness and shifting weather patterns. Conditions that had previously supported demand in September and October 2024 have shifted to become headwinds, weighing on Do-It-Yourself or DIY activity and dampening construction momentum. Foreign exchange is also expected to be a drag, impacting both top-line results and adjusted EBIT.  As a result, management anticipates flat sales growth on a consolidated basis compared to the prior-year period.Segment-wise, the Construction Products Group (CPG) segment (which contributed 36.8% to fiscal 2024 net sales) is expected to see low single-digit revenue growth as momentum in waterproofing solutions continues. However, this strength is being partially offset by less favorable weather conditions when compared to the unseasonably mild weather experienced in the prior-year quarter, which had supported higher activity levels. Our model predicts CPG sales to grow 1% year over year.Consumer Group (CG) (which contributed 33.5% to fiscal 2024 net sales) and Specialty Products Group (SPG, 9.7%) segments continue to grapple with weak residential end-markets. After signs of stabilization in the fiscal second quarter, demand has softened once again due to the reversal of earlier favorable weather and persistently high mortgage rates. As a result, RPM expects low single-digit sales declines in both these segments. We expect CG and SPG segments to register a 1.3% and 1.4% decline in sales from a year ago.Performance Coatings Group (PCG) (which contributed 19.9% to fiscal 2024 net sales) sales are expected to remain flat to slightly up year over year. While demand for high-performance building applications remains solid, the segment faces a difficult comparison to the third quarter of fiscal 2024, which saw a robust 9.2% organic growth rate supported by the timing of several large project completions. Our model predicts PCG sales to grow 0.2% year over year in the quarter.From a profitability standpoint, the company anticipates its fiscal third-quarter adjusted EBIT to range from slightly down to slightly up versus the record levels posted in the same quarter last year. Margin pressures are being driven by softness in residential-facing businesses and moderate inflation in labor and raw material costs. Nonetheless, RPM expects MAP 2025 initiatives, including structural SG&A reductions, to provide partial offsets.Overall, fiscal third-quarter performance is expected to have been muted due to seasonal, macroeconomic, and weather-related challenges.What Our Model Indicates for RPMOur 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 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Zacks Rank: RPM International currently carries a Zacks Rank #4 (Sell).Stocks With a Favorable CombinationAccording 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.Barrick Gold Corporation GOLD has an Earnings ESP of +3.01% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.Barrick’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, the average surprise being 12%. Earnings for Barrick’s to-be-reported quarter are expected to grow 47.4% year over year.The Mosaic Company MOS has an Earnings ESP of +1.58% and a Zacks Rank #3.Mosaic’s earnings missed the consensus mark in three of the last four quarters and topped on other occasion, the average negative surprise being 17.2%. Earnings for Mosaic’s to-be-reported quarter are expected to decline 41.5% year over year.Integra Resources Corp. ITRG has an Earnings ESP of +33.33% and carries a Zacks Rank #3.Integra’s earnings missed the consensus mark in all of the last four quarters, the average negative surprise being 151.8%. Earnings for Integra’s to-be-reported quarter are expected to grow significantly by 162.5% year over year.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Mosaic Company (MOS): Free Stock Analysis Report Barrick Gold Corporation (GOLD): Free Stock Analysis Report RPM International Inc. (RPM): Free Stock Analysis Report Integra Resources Corp. (ITRG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks