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Why H.B. Fuller Stock Dipped on Thursday
Key Points
Its pricing moves offset volume declines.
The company ended up beating on earnings, but whiffing on net revenue.
After publishing its latest quarterly earnings report, chemical company H.B. Fuller (NYSE: FUL) saw its share price erode slightly on Thursday. As a group, investors were slightly dismayed that the company missed on net revenue and posted earnings guidance that could have been more impressive. Fuller's stock declined marginally across that trading session.
Mixed results
For its fiscal third quarter of 2026, Fuller's net revenue was $938 million, up 5% year over year. Much of this stemmed from a 7% increase in overall pricing, which mitigated a decline in sales volume.
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On the bottom line, net income under generally accepted accounting principles (GAAP) jumped almost 18% higher to nearly $79.2 million. On a non-GAAP (adjusted), per-share basis, Fuller's net income was $1.52, well up from the year-ago profit of $1.26.
That meant a mixed quarter for the chemical company (which, by the way, specializes in glues and sealants). It beat the consensus analyst estimate for adjusted net profit ($1.47 per share), but whiffed on the collective pundit projection of more than $948 million for net revenue.
In its earnings release, Fuller said it benefited from its moves on pricing, which helped to offset the higher costs of raw materials. It also said its restructuring efforts were having a positive effect on its business.
Narrowed bottom-line guidance
Fuller also maintained its full-year guidance for net revenue growth, which is expected to top the 2025 figure by a mid-single-digit percentage. The company tightened its adjusted net income guidance to $4.70 to $4.85 per share (previously $4.60 to $4.90).
I think the investor reaction to the company's quarterly performance was reasonable. Although Fuller has been coping better with the current chemical industry downcycle than many of its specialized peers, its results and near-term potential aren't impressive enough to make me hungry to own the stock.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.