Adhesives maker H.B. Fuller blew past analysts' expectations with first quarter adjusted earnings that rose 43 percent from the same period a year ago, to 43 cents a share. Analysts had expected 39 cents a share.
H.B. Fuller's stock closed up 1.6 percent Thursday, to $40.79 a share.
Executives of the Vadnais Heights-based company told analysts Thursday that revenue rose 0.8 percent to $474 million with the help of higher volume sales that offset lower prices and negative currency translations. The high U.S. dollar and the unusual devaluation of the Argentine peso hurt sales revenue by 4.5 percentage points during the quarter, officials said.
Regardless, profits (including nonrecurring items) doubled from a year ago to $18.9 million or 37 cents per share amid lower raw-material costs, new supply-chain efficiencies and a better mix of products.
Results were also helped by H.B. Fuller's newest operating segment, engineering adhesives. It includes adhesive products for electronics, engineering and automotive applications. All products in the new segment demonstrated strong growth and profit performance, officials said. They added that the new segment alignment will help the company better allocate resources and accelerate growth.
"We are off to a solid start to our 2016 fiscal year," CEO Jim Owens told analysts. "We delivered solid organic growth and very strong margin improvement in our targeted segments. … Our efforts resulted in over a 40 percent increase in adjusted [earnings per share] vs. last year's first quarter and a first quarter [earnings before taxes] margin well above historical levels."
H.B. Fuller maintained its prior earnings forecast. Adjusted earnings for the entire 2016 year are expected to be $2.40 to $2.60 per share. The company plans to invest $60 million in building and equipment improvements this year, officials said.
Dee DePass • 612-673-7725
