Tickers in this Article: RPM, SHW, PPG, FOE, DD, F
Specialty paint, coating and sealant maker RPM International (NYSE:RPM) turned in a profitable fiscal third quarter, reversing a loss from last year's same quarter. The performance was led by its industrial segment, though its consumer segment also performed well. The stock was pushed to a new 52-week high on the news.

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A Strong Rebound
The industrial segment, which includes the commercial construction markets, improved in both Europe and the U.S. after two years of lower demand. Sales of industrial coatings and maintenance products were also strong. The industrial segment saw strong performance on a pro-forma basis on revenue of $449.1 million. A deconsolidation of the Specialty Products Holding Corporation and subsidiaries occurred at the end of the last fiscal year, which eliminated $300 million from revenue in the industrial segment. The strong results in the industrial segment this quarter reflect an encouraging overall economic picture. Consumer demand also increased, as that segment showed a 9.8% increase in sales to $229.8 million.

A Hard-Hit Industry
RPM battled to stay profitable during the recession and did so, although its earnings took a beating while it struggled to maintain sales levels. Net income has continually risen since the nadir of 2008, although revenue has fluctuated around the 3.5 billion mark annually. RPM has maintained healthy margins, though, which is a sign of relative stability and resilience through difficult industry times. In the last 12 months, its gross margins, operating margins and net margins all are competitive or better with rivals such as Sherwin-Williams (NYSE:SHW), PPG Industries (NYSE:PPG) and Ferro Corp. (NYSE:FOE).

How lucrative is this industry? Dupont (NYSE:DD) recently sued a California company over the alleged theft of the proprietary information on its specialty titanium dioxide paint, known as TiO2, used by Ford Motor (NYSE:F). The paint is part of a division that posted revenue of $6.32 billion for the chemical maker.

RPM's Performance and Fundamentals
Although its fiscal third quarter is traditionally weak, RPM had $678.9 million in revenue for the quarter, compared to $666.60 in last year's same quarter. Net income was $1.12 million or 1 cent per share, versus a loss of $9.4 million or a loss of 7 cents a share on an diluted basis. Cash flow from operations for the first nine months of RPM's fiscal year reached $191 million, and the company features a reasonable net of cash debt-to-capitalization ratio of 35.3%.The company is a historically strong dividend payer, with a current 3.6% yield.

Strong Outlook
A key part of RPM's report which boosted its stock was its strong outlook for the full year fiscal 2011.The company forecasts a 7 to 8% sales increase to $3.35 billion, with earnings per share in a range of $1.40 to $1.45 for the full year. The forecast for both sales and earnings were markedly raised, with the outlook strong despite the challenge of higher raw material costs.

RPM For Investors
Although RPM has traditionally been regarded as a slow-growing dividend stock, there is potential for it to deliver more exciting returns.The company historically does a good job managing its business through the economic cycles and can provide solid gains. (A diversified portfolio will protect you in a tough market. Get some solid tips here! Check out 5 Tips For Diversifying Your Portfolio.)

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