3 Earnings Reports That Caught My Attention Last Week

As we edge into the fourth quarter, and with three-quarters of the year already in the books, I can't help but point out that the majority of reports up until now have been better than expected. With so many companies reporting during the weeks that comprise earnings season, it's easy for some earnings reports to fall through the cracks.

Each week this year, I've taken a look at three companies that could be worth further research after either beating or missing their profit expectations. Today, we'll take a gander at three more companies that reported earnings last week. They may have slid under your radar, but they deserve a look.

Source: Yahoo! Finance.

Cal-Maine Foods
The egg business is far from glorious, but Cal-Maine has made it work for dividend-seeking investors in recent years. The yolk has actually been on the pessimists, who've seen the stock rise by better than 50% over the past year as dividend payments have plumped up in accordance with profits and Cal-Maine has successfully passed along price increases to its customers. In Cal-Maine's first-quarter report released last week, the company reported a tripling in its net income as EPS easily surpassed Wall Street's projections.

As for me, I'm not sold just yet. While my Foolish colleague Dan Caplinger noted last week that specialized egg offerings like organic and cage-free eggs have a premium price point that's relatively free of economic cyclicality, the majority of Cal-Maine's product lineup is very susceptible to rising feed prices. The U.S. drought, while unpredictable, is liable to leave a rather lasting impact on corn and grain prices for many quarters to come. I consider Cal-Maine's current 4.5% dividend yield a utopia scenario and see this figure falling in coming quarters. Unless Cal-Maine can drastically reduce its costs, I'd take this quarter with a grain of salt.

RPM International
RPM International, which manufactures specialty chemical products used in coating and sealing projects by the industrial, commercial, and consumer sectors, reported a 56% drop in its first-quarter profit last week mainly due to a drop in the value of its assets in India and slow improvement in the construction market.

Confused as to why I'm highlighting a company that merely met Wall Street's estimates and saw net income fall 56%? How about because RPM represents a realistic representation of where we are in the housing rebound cycle? Paint and coating specialist Sherwin-Williams (NYSE: SHW) has gone straight up and trades at 20 times forward earnings, but investors haven't taken a realistic look at how titanium dioxide pigment prices are going to affect its margins or at the fact that annual home sale rates are still barely off their lows.

RPM is a work in progress that produced 6% revenue growth for shareholders and utilized an increase in sales volume and prices in its consumer segment to buoy its results. It also delivered on the dividend front by boosting its payout for a 39th consecutive year. According to a statement from RPM, if these dividends were reinvested, RPM has outperformed the S&P 500 by 49% over the past five years! Those are figures I'm willing to get behind.

Mosaic
Going back to the theme of crops, if you didn't catch fertilizer company Mosaic's earnings last week, I suggest you take a close look.

On the surface, Mosaic's $0.14 miss and lower phosphate sales might appear damning, but the reasons behind its shortfall are actually semi-forgivable. Plant issues and Hurricane Isaac were the primary reasons phosphate sales were down 30% during the quarter, and I consider these both to be one-time events.

Looking at this from a long-term perspective, Mosaic is well set up to take advantage of rising food demand in India and China, and has translated that optimistic outlook into a 500% dividend boost over just the past two quarters. Over the next few months, China's insistence that it pay less per ton for potash could be a slight detriment, but the trend over the long run still places Mosaic well on the radar of any investor looking to take advantage of farmers' need for crop nutrients. PotashCorp's (NYSE: POT) 2 million tons in offshore potash sales was a record last quarter and signals that the global trend is still strongly in favor of potash producers. Keep your eyes on Mosaic going forward.

Foolish roundup
Sometimes an earnings beat or miss isn't as cut-and-dried as it appears. I've given my two cents on what's next for each of these companies -- now it's your turn to sound off. Share your thoughts in the comments section below and consider adding these stocks to your free and personalized Watchlist.

• Add Cal-Maine Foods to My Watchlist.
• Add RPM International to My Watchlist.
• Add Mosaic to My Watchlist.

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