HB Fuller (FUL) accelerated its debt de-leveraging target and downwardly revised its full-year guidance after markets closed on Wednesday as it posted second-quarter results which fell short of analysts’ estimates amid lower construction-related volumes.
The St Paul, Minn.-headquartered firm, which was founded in 1887 and whose adhesives are used to glue shoes, hang wallpaper and manufacture boxes, posted revenue of $760 million for the quarter ended June 1. This was down 3.8% from the corresponding quarter of the prior year. It was also below the consensus estimate of analysts polled by Capital IQ for $779.1 million.
Organic revenue, which strips out the impact of foreign currency, increased by approximately 1% during the quarter. Strong year-on-year organic sales growth in engineering adhesives was partially offset by lower construction-related volumes, primarily due to portfolio repositioning in construction adhesives toward more profitable product lines, the company said.
Adjusted earnings per share came in at $0.88, down from $0.89 a year earlier and below the Street’s forecast for $0.89.
“Strong operational execution drove margin expansion, improved organic revenue growth and excellent cash flow performance in the second quarter, and we forecast additional improvement in the second half of the year,” Jim Owens, chief executive of H.B. Fuller, said. “Our engineering adhesive business grew by double digits and despite weakness in some end markets we continue to drive increased profitability and cash flow conversion.
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