RPM Down on Toxic Earnings, Guidance Healthy

RPM International (NYSE: RPM) is down on Thursday after posting woeful fiscal 2013 third quarter earnings.

The Medina, Ohio-based firm finished with a loss of $0.33 per share versus EPS of $0.05 in Q3 2012. It fell far short of the EPS of $0.06 analysts hoped for.

Revenue climbed nine percent to nearly $844 million and edged the Wall Street consensus of $841.36 million.

Consumer Sales Surge

RPM's consumer segment surged 14.6 percent year-over-year with sales of $311.4 million.

Meanwhile, its industrial segment climbed six percent to $522.3 million.

DOJ and GSA Investigation

RPM Building Solutions Group is involved in discussions with the US Department of Justice (DOJ) and US General Services Administration (GSA) aimed at resolving an investigation into the firm's practices. The investigation involves its compliance with certain pricing terms and conditions of GSA contracts under which the company sold products and services to the federal government.

The company expects a loss of nearly $69 million from this ordeal. However, as the loss remains subject to approval from the DOJ, it could vary from this figure.

New Board Member in the Mix

On January 22, RPM appointed Salvatore D. Fazzolari to its board of directors. He replaced James A. Karman, who retired in October.

Fazzolari is the former chairman, president and CEO of Harsco Corporation (NYSE: HSC). He also serves on the board of Gannet Fleming Affiliates and Susquehanna University.

RPM's newest board member was appointed as a Class II member of the board and will be on the audit committee. His term lasts until 2015, when he will stand for re-election at the company's annual meeting.

Healthy Guidance

RPM expects FY 2013 revenue to climb eight to 10 percent. If this pans out, the company will finish with sales of $4.1 to $4.18 billion. At the middle-ground of $4.14 billion, it would narrowly edge the $4.12 billion analysts expect.

On the EPS front, the chemical manufacturer anticipates a range of $1.80 to $1.85. This places it on course to finish around analysts' estimates of $1.82.

One-Month Low

RPM has held steady in the $30 to $31+ range since late February and continues to do so. However, it is at its lowest point in the past month and sits below $30.50 Thursday in the late morning hours.

RPM is down around one percent on Thursday.