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RPM International Reports Record 3rd-Quarter Revenue in 3Q18

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RPM International’s revenue in fiscal 3Q18

RPM International (RPM) reported record third-quarter revenue in fiscal 3Q18, with revenue rising 7.8% YoY (year-over-year) to $1.1 billion from $1.02 billion in fiscal 3Q17. The revenue exceeded analysts’ estimate of $1.09 billion.

RPM revenue growth was primarily driven by increased revenue across all of its reporting segments, which we’ll discuss in detail in the upcoming parts. RPM sales grew organically by 1.8%, while acquisitions added 3.1%. Furthermore, RPM benefited from continued weakness in the dollar against various currencies, which improved revenue by 2.9%.

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Outlook

RPM’s revenue trend is expected to continue in 4Q18, with it growing by mid-to-upper single digits. RPM is expected to benefit from weakness in the dollar.

Management comments

According to a press release, RPM chairman and CEO Frank Sullivan said, “Sales were brisk in our restoration, OEM and pleasure marine coatings businesses, which were partially offset by expected declines in our edible coatings business as a result of a patent expiration. Specialty generated very strong improvement in EBIT, largely as a result of SG&A cost savings actions we began implementing last year, including a plant closure in Europe, and tight spending controls this year.”

Investors seeking exposure to RPM could consider the First Trust Hedged BuyWrite Income ETF (FTLB), which has invested 1.3% of its portfolio in RPM International. The fund also provides exposure to LyondellBasell Industries (LYB), Delta Air Lines (DAL), and Walmart (WMT), which had weights of 1.2%, 1.0%, and 1.7%, respectively, as of April 6, 2018. In the next part, we’ll analyze RPM’s Industrial segment’s performance in fiscal 3Q18.

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