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H.B. Fuller Q4 Profit Declines, But Beats View

Industrial adhesive maker H.B. Fuller Co. (FUL) on Wednesday reported a 5 percent decline in profit for the fourth quarter, as higher revenues were offset by special as well as asset impairment charges. In addition, the prior-year period's results included a higher income from discontinued operations.

Excluding items, adjusted earnings declined, but beat analysts' estimates. Looking ahead, the company forecast fiscal 2013 earnings in line with analysts' expectations.

St. Paul, Minnesota-based H.B. Fuller's fourth-quarter net income was $25.11 million or $0.49 per share, down from $26.41 million or $0.53 per share for the year-ago quarter.

The latest quarter's results include special charges of $9.20 million and asset impairment charges of $846 thousand, compared to special charges of $7.50 million in the prior-year period.

The prior-year quarter's results include income from discontinued operations of $4.42 million or $0.09 per share.

Excluding items, adjusted earnings were $0.64 per share, compared to $0.65 per share in the year-ago period. On average, seven analysts polled by Thomson Reuters expected the company to earn $0.56 per share. Analysts' estimates typically exclude special items.

Net revenue for the quarter rose 28 percent to $513.26 million from $401.55 million in the year-ago period. Analysts had a consensus revenue estimate of $517.45 million.

In March 2012, H.B. Fuller completed the acquisition of the global industrial adhesives business of Forbo Group.

Excluding the incremental revenue from the acquired Forbo business, net revenue for the quarter was flat, representing 3 percent organic growth that was offset by 3 percentage points of unfavorable foreign currency translation. The organic growth was comprised of a 1 percent increase in price and 2 percent growth in volume.

Jim Owens, president and chief executive officer of H.B. Fuller said, "Our fourth quarter revenue came in right on target and we exceeded our internal expectations for margin expansion as some business integration benefits were realized earlier than anticipated and the raw material cost environment was generally favorable. Our performance trends are good, our integration plans are on schedule and we have strong momentum as we enter the 2013 fiscal year."

For fiscal year 2012, H.B. Fuller's net income rose to $125.62 million or $2.48 per share from $89.11 million or $1.79 per share in the previous year. Excluding items, adjusted earnings were $3.34 per share, compared to $1.94 per share last year.

Net revenue for the year grew 31 percent to $1.89 billion from $1.44 billion in the prior year.

Analysts expected the company to earn $2.15 per share for the year on revenues of $1.86 billion.

Looking ahead to fiscal 2013, H.B. Fuller forecasts adjusted earnings in a range of $2.55 to $2.65 per share and reported revenue growth of more than 10 percent, while organic revenue growth is expected to be in the low single digits.

Street expects the company to earn $2.60 per share for the year on revenues of $2.02 billion.

H.B. Fuller said that integration of the acquired Forbo adhesives business remained on or ahead of schedule, and on track to deliver synergy targets.

FUL closed Wednesday's trading at $36.64, down $0.21 or 0.57 percent on a volume of 375,151 shares.

by RTTNews Staff Writer

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