Nasdaq Down 1.5%; RPM Posts Upbeat Results
Tuesday, Jan 7, 2025 12:29 pm ET
The Nasdaq composite index tumbled 1.5% on Friday, weighed down by a sell-off in Big Tech stocks. The tech-heavy index undercut its 21-day moving average but regained that level by the close as stocks trimmed losses. The S&P 500 descended a sharp 1.1% and dropped below its 21-day moving average. The index, however, managed to hold above the 50-day moving average. The Dow Jones Industrial Average lost 0.8%. The index snapped a five-day win streak as it meets resistance near its 50-day line.

RPM International Inc. (NYSE: RPM), a world leader in specialty coatings, sealants, and building materials, reported record financial results for its fiscal 2024 fourth quarter and full year ended May 31, 2024. The company achieved record adjusted EBIT for the 10th consecutive quarter, with fourth-quarter net income of $180.6 million, diluted EPS of $1.40, and record EBIT of $258.0 million. Record fourth-quarter adjusted diluted EPS of $1.56 increased 14.7% over the prior year.
"We achieved record adjusted EBIT for the 10th consecutive quarter due to our strategic balance and our ability to leverage MAP 2025 operating improvement initiatives to increase profitability," said Frank C. Sullivan, RPM chairman and CEO. "Construction Products Group captured growth opportunities with its differentiated turnkey roofing offerings and wall systems, while Consumer generated record adjusted EBIT, despite continued DIY softness, due to its MAP 2025 initiatives and ability to win market share. Although Performance Coatings Group and Specialty Products Group faced headwinds, we still generated positive organic sales growth on a consolidated basis."
The company's strategic focus on higher-margin products and services has helped mitigate the impact of market challenges. The Construction Products Group and Consumer Group showed particular strength, while challenges persist in certain segments, such as Performance Coatings and Specialty Products, due to project timing and market softness.
Looking ahead, RPM's fiscal 2025 outlook is cautiously optimistic, projecting low single-digit revenue growth and mid-single to low-double-digit adjusted EBIT growth. This guidance reflects the company's ability to navigate a mixed economic environment through continued focus on MAP 2025 initiatives and market outperformance.
The significant reduction in total debt by $556.7 million and improved liquidity position of $1.36 billion provide financial flexibility for future growth opportunities and shareholder returns.
RPM's performance reflects broader market trends and strategic positioning within the specialty coatings, sealants, and building materials industry. The company's ability to generate positive organic sales growth in a challenging environment is noteworthy, particularly given the headwinds in DIY consumer markets and certain geographic regions.
Key market insights include:
* Strong demand for high-performance building projects and renovations, benefiting the Construction Products Group
* Continued softness in DIY consumer takeaway at retail stores, impacting the Consumer Group
* Weakness in disaster restoration and specialty residential OEM markets affecting the Specialty Products Group
* Geographic variations with slight growth in North America offset by declines in emerging markets and Europe
RPM's strategic focus on higher-margin products and services has helped mitigate the impact of market challenges. The company's success in capturing growth opportunities in infrastructure-related projects, including those lowering carbon footprints, aligns with current market trends towards sustainability.
The company's ability to win market share, particularly in the Consumer Group, despite overall market softness, suggests effective product innovation and marketing strategies. However, the continued weakness in DIY markets indicates a potential shift in consumer behavior that may persist in the near term.
RPM's cautious outlook for fiscal 2025, with projected flat to low single-digit sales growth, reflects ongoing market uncertainties. The company's focus on controllable factors and structural improvements through MAP 2025 initiatives positions it well to navigate these challenges and potentially outperform when market conditions improve.