08:49 AM EDT, 04/04/2024 (MT Newswires) -- RPM International ( RPM ) issued a soft fiscal fourth-quarter outlook on Thursday, despite recording higher results on an annual basis in the preceding three-month period.

The specialty chemicals manufacturer anticipates sales for the ongoing quarter to be roughly flat to last year's result. The company logged revenue of $2.02 billion in the fourth quarter of fiscal 2023, while the consensus on Capital IQ is for $2.07 billion. The stock declined nearly 3% in premarket trading.

The tailwinds of infrastructure and reshoring spending benefitting the company's construction products and performance coatings segments are expected to continue, although the latter will face "some temporary headwinds" in the fourth quarter from the timing of project completions, Chief Executive Frank Sullivan said in a statement.

Business conditions for the specialty products division "have shown early signs of stabilization," Sullivan said. Still, some end markets "remain soft," while the consumer group continues to face do-it-yourself pressures, he added.

For the three months through Feb. 29, RPM's adjusted earnings advanced to $0.52 a share from $0.37 the year before, but topped the Street's view for $0.46. Sales nudged 0.4% higher to $1.52 billion, in line with analysts' estimate.

"Our third-quarter results demonstrated our continued ability to grow sales, expand margins and improve cash flow in a mixed economic environment," Sullivan said. "This is due to our strategic balance, our focus on repair and maintenance and our (margin achievement plan) 2025 operating improvement initiatives." The company launched the plan in August 2022 and aims to achieve $8.5 billion in annual revenue by May 31, 2025, as one of the objectives.

Construction products revenue rose to $495.7 million from $475.2 million in the prior-year quarter, while performance coatings revenue climbed 6.9% to $343.5 million. Specialty products slipped 7.6% to $176.5 million, while the consumer segment saw sales drop 4% to $507.2 million.

For fiscal 2024, the maker of specialty coatings, sealants and building materials expects consolidated sales growth near the midpoint of its previously issued outlook for a low-single-digit percentage range increase over the prior year. The Street is looking for revenue of nearly $7.4 billion for this year.

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