(RPM) RPM International – Surging Profits Jump 34%

January 19th, 2010

RPM International (RPM) just posted another earnings surprise on surging profits. Analysts have been quick to raise estimates for the rapidly growing company.

Company Description

RPM owns subsidiaries that provide industrial and consumer coatings and sealants. The weekend warriors might recognize brand names like Rust-Oleum and DAP. Products range from roofing systems to floor coatings.

Earnings Jump 34%

On Jan 6 RPM reported second-quarter results for fiscal 2010. Despite a 3.5% decline in sales, to $859 million, the company managed to increase net income 34% to $56 million.

This led to earnings per share of 43 cents, 1 cent higher than last year and 8 cents higher than the Zacks Consensus Estimate. This is the second consecutive earnings surprise.

Estimates Rising

Since the report, the full-year estimates for fiscal 2010 and 2011 are up. The Zacks Consensus Estimate for this year is now $1.41, up 13 cents, which projects year-over-year growth of 34%.

Estimates for next year now average $1.62, up from $1.52. This forecast is calling fro about 15% growth. Given these growth rates, the PEG ratio is 1.0 times. Additionally, the P/E is just 15 times forward earnings.

The Chart

Shares of RPM continue to trade in a narrow channel, but maintain and overall upward trend. Take a look at the chart below.

A chart for RPM International

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

Zacks Investment Research

More on this topic (What's this?)
Member Q&A: RPM International (tickerspy.com, 10/26/09)
RPM International Increases Dividend 2.5% (Disciplined Approach to Investing, 10/8/09)
RPM International Stock Analysis (The DIV-Net, 10/7/11)
RPM International Inc. (RPM) Dividend Stock Analysis (Dividends Value, 6/21/10)
Read more on RPM at Wikinvest

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