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H.B. Fuller Company (FUL - Free Report) reported mixed results for second-quarter fiscal 2018 (ended May 2018).
Earnings/Revenues
Quarterly adjusted earnings came in at 89 cents per share, up 44% year over year. The bottom line also outpaced the Zacks Consensus Estimate of 86 cents.
Revenues in the reported quarter came in at $789.4 million, up nearly 41% year over year. The upside was primarily driven by the acquisition of the Royal Adhesives & Sealants business (October 2017). Also, double-digit revenue growth in the Asia Pacific, EIMEA and The Engineering Adhesives segments supported the year-over-year jump in revenues.
However, the top line missed the Zacks Consensus Estimate of $808 million.
H. B. Fuller Company Price, Consensus and EPS Surprise
Cost of sales in the fiscal second quarter came in at $567 million, up 36.4% year over year. Adjusted gross profit margin was 28.3%, up 110 basis points (bps) year over year. The expansion stemmed from acquisition-related synergies and ongoing pricing actions.
Selling, general and administrative expenses in the reported quarter came in at $296.2 million, up 37.3% year over year. Operating margin was 9.8%, up 210 bps year over year.
Balance Sheet/Cash Flow
Exiting first-half fiscal 2018, the company’s cash and cash equivalents came in at $129.2 million, down from the $194.4 million recorded at the end of fiscal 2017. Aggregate debt stood at $2,405 million, marginally down from $2,451.9 million reported as of Dec 2, 2017.
Cash flow from operations in the fiscal second quarter was $54 million, out of which $36 million was used to repay debt. By the end of this fiscal (ending November 2018), the company intends to trim its debt by $170 million.
Outlook
H.B. Fuller anticipates that the Royal Adhesives & Sealants business acquisition will bring $15-million cost synergies in fiscal 2018 and $35 million synergies by fiscal 2020. This Zacks Rank #3 (Hold) company remains on track to deleverage its balance sheet on the back of free cash-flow improvement.
Adjusted earnings guidance for fiscal 2018 has been narrowed to the $3.15-$3.40 per share range, from the prior view of $3.10 to $3.40 per share. Revenue growth in the fiscal is anticipated to lie within the 5-6% band. Capital spending for the full fiscal is predicted to be $80 million.
Stocks to Consider
Some better-ranked stocks in the same space are listed below:
KMG Chemicals, Inc. also flaunts a Zacks Rank of 1. The company delivered an average positive earnings surprise of 33.21%, in the trailing four quarters.
Versum Materials Inc. , another Zacks #1 Ranked company, came up with an average positive earnings surprise of 9.39% in the preceding four quarters.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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H.B. Fuller (FUL) Beats on Q2 Earnings, Narrows FY18 EPS View
H.B. Fuller Company (FUL - Free Report) reported mixed results for second-quarter fiscal 2018 (ended May 2018).
Earnings/Revenues
Quarterly adjusted earnings came in at 89 cents per share, up 44% year over year. The bottom line also outpaced the Zacks Consensus Estimate of 86 cents.
Revenues in the reported quarter came in at $789.4 million, up nearly 41% year over year. The upside was primarily driven by the acquisition of the Royal Adhesives & Sealants business (October 2017). Also, double-digit revenue growth in the Asia Pacific, EIMEA and The Engineering Adhesives segments supported the year-over-year jump in revenues.
However, the top line missed the Zacks Consensus Estimate of $808 million.
H. B. Fuller Company Price, Consensus and EPS Surprise
H. B. Fuller Company Price, Consensus and EPS Surprise | H. B. Fuller Company Quote
Costs/Margins
Cost of sales in the fiscal second quarter came in at $567 million, up 36.4% year over year. Adjusted gross profit margin was 28.3%, up 110 basis points (bps) year over year. The expansion stemmed from acquisition-related synergies and ongoing pricing actions.
Selling, general and administrative expenses in the reported quarter came in at $296.2 million, up 37.3% year over year. Operating margin was 9.8%, up 210 bps year over year.
Balance Sheet/Cash Flow
Exiting first-half fiscal 2018, the company’s cash and cash equivalents came in at $129.2 million, down from the $194.4 million recorded at the end of fiscal 2017. Aggregate debt stood at $2,405 million, marginally down from $2,451.9 million reported as of Dec 2, 2017.
Cash flow from operations in the fiscal second quarter was $54 million, out of which $36 million was used to repay debt. By the end of this fiscal (ending November 2018), the company intends to trim its debt by $170 million.
Outlook
H.B. Fuller anticipates that the Royal Adhesives & Sealants business acquisition will bring $15-million cost synergies in fiscal 2018 and $35 million synergies by fiscal 2020. This Zacks Rank #3 (Hold) company remains on track to deleverage its balance sheet on the back of free cash-flow improvement.
Adjusted earnings guidance for fiscal 2018 has been narrowed to the $3.15-$3.40 per share range, from the prior view of $3.10 to $3.40 per share. Revenue growth in the fiscal is anticipated to lie within the 5-6% band. Capital spending for the full fiscal is predicted to be $80 million.
Stocks to Consider
Some better-ranked stocks in the same space are listed below:
CSW Industrials, Inc. (CSWI - Free Report) sports a Zacks Rank #1 (Strong Buy). The company pulled off an average positive earnings surprise of 9.8% over the past four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
KMG Chemicals, Inc. also flaunts a Zacks Rank of 1. The company delivered an average positive earnings surprise of 33.21%, in the trailing four quarters.
Versum Materials Inc. , another Zacks #1 Ranked company, came up with an average positive earnings surprise of 9.39% in the preceding four quarters.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>