13 September 2010 23:28 [Source: ICIS news]
HOUSTON (ICIS)--HB Fuller posted a third-quarter net income of $19m (€15m), down 46% year over year amid rising raw material costs and contracting end-market demand in North America, the US sealants and adhesives maker said on Monday.
Net income in the 2009 third quarter was also inflated by a large one-time gain related to a lawsuit settlement, HB Fuller said. Excluding the settlement, 2009 third-quarter earnings were 48 cents/share, compared with 38 cents/share this year.
2010 net revenue for the quarter ending 28 August was $338.6m, up 7.4% year over year.
“We faced many challenges in the third quarter - most notably rising raw material costs and raw material shortages - and achieved mixed results,” said CEO Michele Volpi.
“While we were successful in sourcing sufficient material to satisfy customer orders, our material costs escalated more than our prices, and profit margins did not meet our expectations,” he continued.
“Additionally, in the North America region, end-market demand contracted significantly at the beginning of the quarter, and consequently, we did not achieve our volume expectations in the region,” he said.
In the Asia Pacific region, sales grew by 27.2% year over year and economic activity remained strong, the company said.
That contrasted with a net revenue growth of just 5.2% in North America, where sales momentum slowed significantly – especially in construction products – at the start of the third quarter, HB Fuller said. However, the company noted that construction demand improved somewhat by the end of the quarter.
Looking ahead, HB Fuller said it expected net revenues to rise sequentially for the fourth quarter, landing between $360m and $365m. Overall 2010 revenues would be up about 10% from 2009, the company said.
HB Fuller’s stock, which trades on the New York Stock Exchange, dropped $1.50, or 7.1%, to $19.50/share in Monday after-hours electronic trading.
($1 = €0.79)
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