H.B. Fuller delivered on its third-quarter earnings guidance despite the impact of Hurricane Harvey, although it did narrow its full-year forecast because of business interruptions caused by the disaster.
“Our actions delivered earnings per share consistent with our expectations and higher EBITDA delivery vs. the prior quarter and prior year, despite the negative impact on sales from Hurricane Harvey late in the quarter,” said President and CEO Jim Owens in the company’s earnings release.
Net income for the quarter was $25.1 million, or 49 cents per share, compared with $32.7 million, or 64 cents per share, in the same period a year ago.
Earnings per share adjusted for special charges related to business integration and organizational realignment plans and accounting for past and present acquisitions were 65 cents per share in the current quarter compared to 64 cents in the third quarter last year. Analysts were expecting the company to report adjusted earnings of 67 cents per share.
H.B. Fuller’s third-quarter revenue rose 9.8 percent to $562.9 million. On a constant currency basis, revenue grew 11 percent.
Fuller also said it was narrowing its adjusted EPS guidance for the remainder of the year due to short-term impacts of Hurricane Harvey. The company lowered its guidance to $2.57 to $2.62 per share, from the previous guidance of $2.57 to $2.67 per share.
Owens told the analysts that Hurricane Harvey struck in the last week of the company’s third quarter. Employees in the area are safe but some had damage to their homes. Fuller’s Texas manufacturing facilities had minimal damage, though, and a week after the hurricane hit, the company was able to get it back up and running.
The lost week of production and distribution did reduce revenue by over $3 million and EPS by 2 cents per share.
However, a supply chain of certain materials produced in the region means Fuller has higher local prices for the short term.
Shares closed at $58.26, up $1.49, or 2.6 percent.
On Sept. 4, after the third quarter had closed, Fuller announced a $1.6 billion deal to acquire Royal Adhesives and Sealants LLC, a South Bend, Ind.-based maker of industrial and specialty adhesives and sealant products.
It will be the largest acquisition in Fuller’s history, and executives said the transaction is on track.
“Royal Adhesives will accelerate our strategy by combining their strong presence in specified adhesive applications with our global reach and focus,” Owens said in the release.