Adhesives giant H.B. Fuller Co. reported mixed second-quarter results and lowered its forecast for the year Thursday, citing pressures from the high U.S. dollar, a still weakened Europe, rising taxes and pinched revenue.
The Vadnais Heights-based maker of glues used in diapers, cereal boxes, sanitary products, shopping bags, food labels, sealants and more, reported second-quarter revenue slid 0.6 percent to $540.8 million.
Profits from continuing operations rose 28 percent to $26.5 million or 51 cents per share. However, total adjusted earnings fell to 63 cents a share from 78 cents for the same period one year ago. Analysts had expected profits of 66 cents a share and revenue of $555 million for the quarter.
"The negative impacts of a stronger U.S. dollar and a higher core tax rate were key drivers of the year-over-year decline in adjusted diluted earnings per share," officials said in a statement. The company also boosted its expected tax rate for the year. Officials cited the delay in improvement in its European operations, which "is shifting the mix of our consolidated pre-tax earnings to the United States, where our effective tax rate is relatively high."
While that hurt the outlook for the rest of the year, CEO Jim Owens said H.B. Fuller saw other positives during the first six months of 2015. Raw material costs dropped. Prices rose. And its market share for construction products grew.
Also "the newly acquired Tonsan business is meeting all of our expectations to date and is already helping to improve the overall profit profile of our Asia-Pacific operating segment," Owens said.
For the full year, Owens now expects adjusted earnings of $2.45 per share and revenue of $2.1 billion. The previous outlook called for earnings of $2.60 per share and revenue of $2.15 billion.
H.B. Fuller's stock rose 22 cents a share to $42.29 on Thursday.
