H.B. Fuller CEO Jim Owens — while discussing better-than-expected third-quarter results — said he expects recessionary forces to continue into next year.
The St. Paul-based industrial and commercial adhesives company reported revenue down nearly 5% for the quarter ended Aug. 29, but that was improved from the second quarter.
Owens said in a conference call with analysts that end markets are improving and the company expects COVID-19 restrictions to continue to lessen through the rest of the year.
While acknowledging continued global economic uncertainty, H.B. Fuller is among the few larger public companies offering guidance for its fourth quarter.
The company is expecting revenue to improve 4 to 7% from the third quarter, while still being flat to down 3% compared with the fourth quarter last year. Adjusted earnings are expected to be nearly the same as the fourth quarter of 2019.
Fuller's third-quarter revenue was $691 million, down 4.7% from the same quarter last year. After adjusting for currency exchange rates and the sale of a unit that makes surfactants, thickeners and dispersants, revenue was down 2.5%.
"In the third quarter, we delivered higher than expected organic revenue performance by building on our market share gains in HHC, improving performance in construction adhesives and winning new business in engineering adhesives," Owens said in a statement.
Earnings were $41.6 million, or 79 cents a share, down more than 15% from the same period a year ago.
Adjusted earnings were $40 million, or 76 cents per share, better than the 70 cents per share analysts were expecting.
Owens said the company continued to realize operational cost efficiencies from its realignment of global business units, reduced general expenses and its work to bring down raw-material costs.
The restructuring earlier this year reorganized business units into three categories: hygiene, health and consumable adhesives; construction adhesives; and engineering adhesives.
Shares of H.B. Fuller closed Thursday at $45.44, down 69 cents. Over the last 52 weeks, shares have traded between $23.74 and $52.35 per share.