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RPM fiscal 1Q profit tumbles on charges

MEDINA, Ohio -- RPM International Inc. said Wednesday its fiscal first-quarter net income fell by more than half, hurt by hefty charges mostly related to a drop in value of assets in India.

RPM said it has seen gradual improvement in North American construction, which affects about 30 percent of its industrial sales, but said it remains significantly below prerecession levels.

For the quarter ended Aug. 31, the maker of Rust-Oleum, sealants and business materials earned $33.9 million, or 26 cents per share, up from $76.8 million, or 59 cents per share, in the same quarter last year.

The recent quarter's results included a non-cash charge of $45.3 million related to the investments in India and an $11 million charge stemming from a decision to exit certain unprofitable contracts at its roofing division.

Excluding those items, RPM said it posted an adjusted profit of $84.8 million, or 64 cents per share.

That matched average analysts' predictions, according to a FactSet poll.

Revenue rose 6.2 percent to $1.05 from $985.9 million, slightly below analysts' expectations of $1.08 billion.

Revenue at the company's consumer division rose 7.7 percent to $343.4 million, boosted by both higher sales volumes and prices. Industrial sales rose 5.4 percent to $703.3 million, helped by contributions from acquisitions.

The company said it now expects its full-year earnings to grow between 9 percent and 12 percent to $1.80 to $1.85 per share, before one-time charges. The company previously predicted growth of 5 percent to 10 percent. Analysts expect earnings of $1.80 per share.

RPM also raised the bottom of its 2013 sales guidance range, saying it now expects consolidated sales growth of 8 percent to 10 percent. The company previously predicted growth of 5 percent to 10 percent.

The new prediction implies fiscal 2013 sales of between $4.08 billion and $4.16 billion. Analysts expect $4.09 billion.

RPM shares rose 2 cents to $26.65 in morning trading. They peaked for the year at $29.47 on Sept, 21.