Volatile stock to watch: RPM International Inc. (NYSE: RPM)

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RPM International Inc. (NYSE: RPM) stock fell 2.38% on October 1st, 2019 and continued its bearish momentum falling over 0.09% (as of 12:10 pm GMT-4; Source: Google finance) after the company posted mixed results for the first quarter of FY 20.

The company reported 52% increase in the first-quarter net income to $106.2 million. Income before income taxes (IBT) grew 55.4% to $142.8 million compared to $91.9 million reported in the fiscal 2019 first quarter. RPM’s consolidated earnings before interest and taxes (EBIT) grew 45.5% to $165.8 million compared to $113.9 million reported in the fiscal 2019 first quarter.

RPM in the first quarter of FY 20 has reported the adjusted earnings per share of 95 cents, beating the analysts’ estimates for the adjusted earnings per share of 91 cents. The company had reported almost flat adjusted revenue growth to $1.47 billion in the first quarter of FY 20, missing the analysts’ estimates for revenue of $1.49 billion. The sales growth in July was modest due to an extremely wet June that slowed painting and construction activity in North America and unfavorable foreign exchange.

Moreover, RPM’s Construction Products Group net sales grew 3.6%, to $536.1 million during the first quarter of fiscal 2020 compared to $517.5 million posted in fiscal 2019 first-quarter sales, which reflects the organic growth of 0.7% and acquisitions contributing an additional 4.4%. The company for segment IBT reported $82.7 million compared to IBT of $65.0 million a year ago. IPT’s EBIT was $84.7 million, up 25.8% compared to EBIT of $67.3 million in the fiscal 2019 first quarter. Consumer Group had reported the sales of $479.3 million during the first quarter of fiscal 2020 compared to sales of $477.4 million reported in the first quarter of fiscal 2019. Organic sales rose 0.1%, while the acquisition growth contributed 1.3%.  The Specialty Products Group had reported the sales of $160.1 million during the first quarter of fiscal 2020 as compared to sales of $168.7 million in the fiscal 2019 first quarter. Organic sales of the segment fell by 4.3%.

For the second quarter of fiscal 2020, the company expects sales to be up 2% to 3% with an estimated 20% to 24% adjusted EBIT growth, that resulted in adjusted diluted EPS in the low- to mid-70-cent range.

For full-year fiscal 2020, the revenue growth is expected to be on the low end of the previously disclosed range of 2.5% to 4%. The adjusted diluted EPS is expected to be between between $3.30 and $3.42 for fiscal 2020.

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