Specialty chemical products company RPM International, Inc. (RPM) reported Wednesday a profit for the first quarter of fiscal 2013 that more than halved from last year, hurt by hefty one-time charges.
However, adjusted earnings per share for the quarter matched analysts' expectations, while quarterly revenues missed their estimates by a whisker. Meanwhile, the company raised its earnings and revenue growth guidance for the full-year 2013, citing continued robust growth in North America.
"First-quarter operating results were on plan, with both our industrial and consumer segments posting increases in sales and EBIT, prior to the one-time adjustments that impacted the industrial segment. Most of our operating units are seeing growth in unit volume, pricing improvement and a stabilization of raw material prices," Chairman and CEO Frank Sullivan said in a statement.
The Medina, Ohio-based company reported net income of $33.9 million or $0.26 per share for the first quarter, sharply lower than $76.8 million or $0.59 per share in the prior-year quarter.
Results for the latest quarter primarily include a one-time, non-cash charge of $45.3 million for the write-down of the company's investments in Kemrock Industries and Exports Limited in India.
Excluding items, adjusted net income for the quarter was $84.8 million or $0.64 per share, compared to $76.8 million or $0.59 per share in the year-ago quarter.
On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.64 per share for the first quarter. Analysts' estimates typically exclude one-time items.
Net sales for the quarter increased 6.2 percent to $1.05 billion from $985.92 million in the same quarter last year, but missed five Wall Street analysts' consensus estimate of $1.08 billion by a whisker.
Net sales for the industrial segment grew 5.4 percent to $703 million, and consumer segment net sales increased 7.7 percent to $343 million from the year-ago quarter.
"We are seeing gradual improvement in North American commercial construction, which affects about 30% of our industrial segment and which is still considerably below its pre-recession peak," Sullivan added.
The company noted that it acquired three companies with annual sales of about $225 million during the first four months of fiscal 2013, with all acquisitions expected to be accretive to earnings within one year.
Looking ahead to fiscal 2013 and based on the first-quarter results, the company now expects adjusted earnings per share to grow in a range of 9 to 12 percent to $1.80 to $1.85, on currently projected sales growth between 8 and 10 percent, implying sales between $4.07 billion and $4.15 billion.
Street is currently looking for full-year 2013 earnings of $1.80 per share on annual sales of $4.08 billion.
Earlier, the company anticipated adjusted earnings per share and annual revenues to grow in a range of 5 to 10 percent, implying earnings in a range of $1.73 to $1.82 per share on sales between $3.96 billion and $4.15 billion.
The company added that it raised the outlook based on continued robust growth in North America, recent acquisitions and more favorable foreign currency comparisons during the back half of this fiscal year.
RPM closed Tuesday's regular trading session at $26.63, down $1.36 on a volume of 3.03 million shares, higher than the three-month average volume of 0.70 million shares.
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