H.B. Fuller Q3 Adj. EPS Misses Estimates, But Revenues Top; Narrows FY EPS View

(RTTNews) - H.B. Fuller Co. (FUL) reported that its net income for the third quarter of 2017 declined to $25.1 million or $0.49 per share, from $32.7 million or $0.64 per share, in last year's third quarter.

Adjusted earnings per share in the third quarter of 2017 were $0.65 versus the prior year's adjusted result of $0.64. Strong volume growth and positive pricing actions to offset higher year-over-year raw material costs were the primary driver of the year-over-year increase. Analysts polled by Thomson Reuters expected the company to report earnings of $0.67 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue for the third quarter of 2017 was $562.9 million, up 9.8 percent versus the third quarter of 2016. Wall Street expected revenues of $555.28 million. Higher volume, pricing and acquisitions positively impacted net revenue growth, which was offset by negative foreign currency translation. Constant currency revenue grew by 11 percent year over year. Organic revenue, defined as constant currency revenue less the impact from acquisitions, was up more than 7 percent year-on-year.

The company narrowed its adjusted earnings per share guidance from its previous range of $2.57 to $2.67 to its new guidance range of $2.57 to $2.62 for fiscal year 2017, reflecting the short term impact of Hurricane Harvey. Analysts expect annual earnings of $2.6 per share.

Adjusted EBITDA for fiscal year 2017 is expected to be about $290 million versus previous estimate of $290 to $300 million.

Constant currency growth, on a comparable 52-week basis, is now expected to be around 10 percent for 2017 versus the 2016 fiscal year which reflects strong volume growth and more pricing to offset raw material inflation, which will be offset by approximately 2 percentage points of negative foreign currency translation.

The company expects capital investments to be around $50 million - below previously announced $60 million in 2017 as a result of timing and planned shifting of resources toward the Royal acquisition.