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H.B. Fuller (FUL) Q4 Earnings Beats Estimates, Sales Miss
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H.B. Fuller Company (FUL - Free Report) announced its fourth-quarter fiscal 2023 financial results. It reported adjusted earnings per share (EPS) of $1.32. This figure beat the Zacks Consensus Estimate of $1.29, resulting in an earnings surprise of 2.3%. This marks a 27% increase from the previous year’s levels, primarily fueled by robust growth in operating income.
The company's net revenues for the quarter came in at $902.9 million, down 5.8% from the previous year's $958.2 million. The company also missed the Zacks Consensus Estimate for revenues of $927 million by 2.7%.
Organic revenues experienced a 3.5% year-on-year decline. Pricing led to a 3.4% reduction in organic revenues, while volume impacted revenues by 0.1%. Foreign currency translation had a positive impact of 0.3%. Acquisitions boosted net revenues by 4.4%. However, the effect of one less week in the fourth quarter resulted in a 7% reduction in net revenues.
Gross profit for the fourth quarter was reported at $274 million, with adjusted gross profit at $283 million. The adjusted gross margin demonstrated a notable improvement, increasing by 510 basis points (bps) year on year to 31.3%. This positive shift was attributed to pricing and raw material cost actions, restructuring benefits and overall cost reductions.
Selling, general, and administrative (SG&A) expenses amounted to $160 million in the fourth quarter of fiscal 2023 and adjusted SG&A was $156 million, remaining relatively unchanged compared with the previous year’s figures. The company managed to offset inflation in wages and services, along with incremental SG&A costs from acquisitions, through continued cost management and additional restructuring benefits.
Adjusted EBITDA in the fiscal fourth quarter reached $173 million, reflecting a substantial 22.4% year-on-year increase. The adjusted EBITDA margin also improved by 440 bps to 19.1%. Factors contributing to this growth included a balance of raw material and price movements compared to the prior year, as well as restructuring savings. It's noteworthy that the fourth quarter of this year had one less week than the same period in the previous year, negatively impacting adjusted EBITDA growth by approximately $10 million.
H. B. Fuller Company Price, Consensus and EPS Surprise
The company's net revenues for the fiscal 2023 was $3.51 billion, down 6.4% year over year. Organic revenues declined by 5.5%, driven by an 8.4% drop in volume due to customer destocking, partially offset by a 2.9% favorable pricing. Adjusted EPS were $3.87, lower than $4.00 reported in the previous year. The downtick was caused by higher net interest expenses and unfavorable foreign currency exchange.
Financials
H.B. Fuller's net debt at the end of the fourth quarter of fiscal 2023 was $1,659 million, showing a sequential decrease of $131 million and a year-on-year decline of $26 million.
Cash flow from operations in the fiscal 2023 was $378 million compared with $256 million in fiscal 2022.
Outlook
For the fiscal 2024, the company anticipates net revenue growth in the range of 2-6%, with organic revenues flat to up 3% compared with fiscal 2023 numbers. This projection reflects an expected rebound in demand following the customer destocking activity in the fiscal 2023. This will be offset by slightly lower pricing due to customers qualifying for lower-price formulations and the greater impact of index-based pricing.
Adjusted EBITDA for the fiscal 2024 is expected to be between $610 million and $640 million, indicating growth of 5-10% year on year.
Adjusted EPS are expected to be in the range of $4.15-$4.45 for the fiscal 2024, reflecting growth range of up to 7-15% year on year. Operating cash flow in the fiscal 2024 is forecasted to be between $300 million and $350 million, while capital expenditures are expected to be approximately $140 million.
Price Performance
The company’s shares have risen 11.5% in the past year compared with the industry’s 17.3% increase.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
H.B. Fuller currently carries a Zacks Rank #3 (Hold).
Cameco has a projected earnings growth rate of 156% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 6.7% in the past 60 days. The stock is up around 78.7% in a year.
The consensus estimate for CRS’s current fiscal year earnings is pegged at $3.96, indicating a year-over-year surge of 247.4%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 49.9% in the past year.
ANDE beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 32.8%. The company’s shares have increased 47.5% in the past year.
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H.B. Fuller (FUL) Q4 Earnings Beats Estimates, Sales Miss
H.B. Fuller Company (FUL - Free Report) announced its fourth-quarter fiscal 2023 financial results. It reported adjusted earnings per share (EPS) of $1.32. This figure beat the Zacks Consensus Estimate of $1.29, resulting in an earnings surprise of 2.3%. This marks a 27% increase from the previous year’s levels, primarily fueled by robust growth in operating income.
The company's net revenues for the quarter came in at $902.9 million, down 5.8% from the previous year's $958.2 million. The company also missed the Zacks Consensus Estimate for revenues of $927 million by 2.7%.
Organic revenues experienced a 3.5% year-on-year decline. Pricing led to a 3.4% reduction in organic revenues, while volume impacted revenues by 0.1%. Foreign currency translation had a positive impact of 0.3%. Acquisitions boosted net revenues by 4.4%. However, the effect of one less week in the fourth quarter resulted in a 7% reduction in net revenues.
Gross profit for the fourth quarter was reported at $274 million, with adjusted gross profit at $283 million. The adjusted gross margin demonstrated a notable improvement, increasing by 510 basis points (bps) year on year to 31.3%. This positive shift was attributed to pricing and raw material cost actions, restructuring benefits and overall cost reductions.
Selling, general, and administrative (SG&A) expenses amounted to $160 million in the fourth quarter of fiscal 2023 and adjusted SG&A was $156 million, remaining relatively unchanged compared with the previous year’s figures. The company managed to offset inflation in wages and services, along with incremental SG&A costs from acquisitions, through continued cost management and additional restructuring benefits.
Adjusted EBITDA in the fiscal fourth quarter reached $173 million, reflecting a substantial 22.4% year-on-year increase. The adjusted EBITDA margin also improved by 440 bps to 19.1%. Factors contributing to this growth included a balance of raw material and price movements compared to the prior year, as well as restructuring savings. It's noteworthy that the fourth quarter of this year had one less week than the same period in the previous year, negatively impacting adjusted EBITDA growth by approximately $10 million.
H. B. Fuller Company Price, Consensus and EPS Surprise
H. B. Fuller Company price-consensus-eps-surprise-chart | H. B. Fuller Company Quote
FY23 Results
The company's net revenues for the fiscal 2023 was $3.51 billion, down 6.4% year over year. Organic revenues declined by 5.5%, driven by an 8.4% drop in volume due to customer destocking, partially offset by a 2.9% favorable pricing. Adjusted EPS were $3.87, lower than $4.00 reported in the previous year. The downtick was caused by higher net interest expenses and unfavorable foreign currency exchange.
Financials
H.B. Fuller's net debt at the end of the fourth quarter of fiscal 2023 was $1,659 million, showing a sequential decrease of $131 million and a year-on-year decline of $26 million.
Cash flow from operations in the fiscal 2023 was $378 million compared with $256 million in fiscal 2022.
Outlook
For the fiscal 2024, the company anticipates net revenue growth in the range of 2-6%, with organic revenues flat to up 3% compared with fiscal 2023 numbers. This projection reflects an expected rebound in demand following the customer destocking activity in the fiscal 2023. This will be offset by slightly lower pricing due to customers qualifying for lower-price formulations and the greater impact of index-based pricing.
Adjusted EBITDA for the fiscal 2024 is expected to be between $610 million and $640 million, indicating growth of 5-10% year on year.
Adjusted EPS are expected to be in the range of $4.15-$4.45 for the fiscal 2024, reflecting growth range of up to 7-15% year on year. Operating cash flow in the fiscal 2024 is forecasted to be between $300 million and $350 million, while capital expenditures are expected to be approximately $140 million.
Price Performance
The company’s shares have risen 11.5% in the past year compared with the industry’s 17.3% increase.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
H.B. Fuller currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Cameco Corporation (CCJ - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and The Andersons (ANDE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cameco has a projected earnings growth rate of 156% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 6.7% in the past 60 days. The stock is up around 78.7% in a year.
The consensus estimate for CRS’s current fiscal year earnings is pegged at $3.96, indicating a year-over-year surge of 247.4%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 49.9% in the past year.
ANDE beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 32.8%. The company’s shares have increased 47.5% in the past year.