US HB Fuller Q1 income jumps to $19m on higher sales

30 March 2010 23:53  [Source: ICIS news]

HOUSTON (ICIS news)--HB Fuller posted a 2010 first-quarter net income of $19m (€14.1m), more than tripling the $6.1m earned in the 2009 first quarter on higher sales and volumes, the US sealants maker said on Tuesday.

Net revenue was $309.4m, up 11.1% year over year as volumes rose 8.3% and sales grew by 6.1%. Revenue declined 9% on a sequential basis from the fourth quarter, reflecting a normal seasonal pattern, HB Fuller said.

“We are very pleased with our strong first quarter results,” CEO Michele Volpi said, calling it the company's "highest first quarter earnings per share result in recent history.”

By region, each of the company’s operating segments improved its sales trend, HB Fuller said. Latin America was the only region that did not grow.

In North America, growth was spurred by a 7% sales increase in adhesives and 1.5% gain in specialty construction. The latter was particularly impressive given the severe declines in end-market construction demand in the last several years, the company said.

In Latin America, adhesives were up nearly 5%, but paints were down 5% due to declines in construction-related activities in Central America, the company said.

The Asia Pacific region posted the strongest revenue growth, expanding more than 30% year over year as sales grew by 15%.

Overall, the company credited the higher sales to successful new business development efforts coupled with more favourable economic conditions.

Looking ahead, the company said its margins would likely decline in the second quarter because of an 8% year-over-year increase in raw material costs, compared with a 5% decrease in the first quarter.

However, margins would likely rebound somewhat in the third and fourth quarters, HB Fuller said. Overall, net revenues should be 9%-11% higher in 2010 than 2009 as more stable global economic conditions are leading to improved volumes, Volpi said.

($1 = €0.74)

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By: Ben DuBose
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