RPM International ( NYSE: RPM ) fell in premarket trading after the maker of coatings and building materials forecast that sales growth would slow in its fiscal Q3.
Sales in the current quarter will rise by a low to mid-single-digit percentage from a year earlier, which is a lower growth rate than in the previous five quarters.
“While long-term visibility remains limited, economic conditions have recently become increasingly challenging as higher interest rates have negatively impacted construction activity, existing home sales and overall economic activity," Frank C. Sullivan, chairman and CEO of RPM, said in a statement.
"Additionally, some customers are temporarily moderating purchases as they normalize inventories in response to a more stable supply chain," he said. "As a result, certain RPM businesses have experienced reduced customer demand, a trend that is expected to continue throughout the third quarter."
RPM provided the guidance while reporting that its profit and sales climbed in Q2 on healthy demand and higher prices for its products, though results missed analyst estimates.
Its record profit of $131.3 million, or $1.02 a share, was less than the consensus estimate of $142.2 million for the three month period ended on November 30. A year earlier, RPM reported a profit of $124.9 million, or 96 cents a share.
Adjusted earnings of $1.10 a share matched Wall Street’s estimate. Net sales advanced 9.3% from a year earlier to a record $1.79 billion, missing the consensus forecast of $1.81 billion by $20 million.
“The second quarter was a positive one for RPM with record sales and significant margin expansion resulting in record adjusted EBIT,” Sullivan said. “All four of our segments achieved record second-quarter sales, which included the impact of significant foreign exchange headwinds.”
For further details see:
RPM International falls in premarket on guidance for slower growth