The 10-second takeaway
For the quarter ended Nov. 30 (Q2), RPM International beat expectations on revenues and missed on earnings per share.
Compared to the prior-year quarter, revenue improved, and earnings per share increased slightly.
Margins dropped across the board.
RPM International booked revenue of $916 million. The five analysts polled by S&P Capital IQ expected a top line of $895 million. Sales were 11% higher than the prior-year quarter's $826 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.37. The seven earnings estimates compiled by S&P Capital IQ predicted $0.39 per share on the same basis. GAAP EPS of $0.38 for Q2 were 1.5% higher than the prior-year quarter's $0.38 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 40.3%, 80 basis points worse than the prior-year quarter. Operating margin was 9.5%, 130 basis points worse than the prior-year quarter. Net margin was 5.5%, 40 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $731 million. On the bottom line, the average EPS estimate is $0.01.
Next year's average estimate for revenue is $3.7 billion. The average EPS estimate is $1.56.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 344 members out of 367 rating the stock outperform, and 24 members rating it underperform. Among 91 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 89 give RPM International a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on RPM International is hold, with an average price target of $26.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.