-- RPM International's (RPM) fiscal third-quarter results topped market expectations, while the specialty coatings manufacturer reiterated its sales growth outlook for the ongoing three-month period.
The company on Wednesday reported adjusted earnings of $0.57 per share for the quarter ended Feb. 28, up from last year's $0.35, which was the consensus on FactSet. Sales advanced 8.9% to $1.61 billion, topping the Street's view of $1.55 billion.
The stock jumped 12% in Wednesday trade, taking its year-to-gain 4.8%. RPM is the parent of brands including Varathane, which offers wood-finishing products.
"In a period of volatile market conditions, we generated volume growth and record sales by utilizing our competitive strengths and nimbly focusing on growing end markets," Chief Executive Frank Sullivan said in a statement. "We demonstrated our ability to combine growth with efficiency, leveraging higher volumes to expand margins across all segments."
RPM continues to project fourth-quarter sales to increase by a mid-single digit versus the prior-year period. The Street is looking for $2.17 billion.
"We expect to grow sales and adjusted (earnings before interest and taxes) again in the fourth quarter and deliver record results, even as we face more challenging comparisons and geopolitical uncertainty in the Middle East adds cost and complexity to the operating environment," according to Sullivan.
The US and Iran on Tuesday agreed to a two-week ceasefire. The war, which began at the end of February, spread across the Middle East and curtailed shipments through the crucial Strait of Hormuz, driving up energy prices.
The company is seeking to mitigate higher raw material costs and ensure supply, while implementing pricing actions to offset the remaining cost headwinds, Sullivan said.
In the third quarter, sales in the construction products segment climbed nearly 11% to $546.7 million, driven by the company's North American businesses. The performance coatings division saw revenue increase 8.4% to $496.8 million, while the consumer business improved 7.9% to $564.5 million.
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