H.B. Fuller Profit Misses Estimate; Outlook Weak - Update

(RTTNews) - Paint and adhesive maker H.B. Fuller Co. (FUL), Wednesday reported a decline in fourth-quarter profit as reduced margins offset a four percent growth in revenue. While earnings for the quarter missed Wall Street estimates, revenue exceeded expectations.

Moving forward, the company provided weak adjusted earnings outlook for both the first quarter and fiscal year 2014.

The St. Paul, Minnesota-based company posted quarterly net income of $22 million or $0.43 per share, compared with $25 million or $0.49 per share in the prior year.

Excluding items, adjusted earnings from continuing operations for the quarter were $35 million or $0.68 per share, compared with $32.5 million or $0.64 per share last year. On average, seven analysts polled by Thomson Reuters expected earnings of $0.75 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the fourth quarter grew 4 percent to $533.5 million from $513 million a year ago. Analysts estimated revenue of $527 million for the quarter.

Growth was mainly led by Americas Adhesives and Asia Pacific regions.

Higher volume and foreign currency translation positively impacted net revenue growth by 4.2 and 0.4 percentage points, respectively. Lower average selling prices negatively impacted net revenue growth by 0.6 percentage points.

Gross margin for the quarter fell to 27.3 percent from 28 percent last year.

For the first quarter, H.B. Fuller has forecast adjusted earnings of $0.50 per share. Analysts currently expect earnings of $0.60 per share for the quarter.

For fiscal 2014, the company has forecast adjusted earnings of $3.0 to $3.15 per share, while analysts expect $3.11 per share.

As for the long term, the company still expects to achieve organic revenue growth of between 5 percent and 8 percent per annum, and grow earnings per share by 15 percent per annum by 2015.

The company expects fiscal 2014 revenue growth at the low end of long-term growth targets of 5 percent to 8 percent, with momentum in the Asia Pacific and Construction Products operating segments.

H.B. Fuller stock closed Wednesday at $52.55, down $0.19 or 0.36% on a volume of 626 thousand shares on the NYSE. In after hours, the stock gained $0.10 or 0.19%.