Bullish stock to watch: HB Fuller Co (NYSE: FUL)

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HB Fuller Co (NYSE: FUL) stock rose 2.19% over 25th March, 2020 (Source: Google finance) after the company posted decent results for the first quarter of FY 20. The company’s net income fell to $9.9 million, from $12.2 million, a year earlier. The company has delivered strong operational performance in the first quarter due to its robust global supply chain and business exposure to broadly diversified end markets and goods that are considered essential during the COVID-19 pandemic. During the fourth quarter, the company had rapidly implemented health, safety and business continuity plans that are driving positive results. The restructuring savings were $6 million in the first quarter. The company has accelerated projects and increased total expected savings to the high end of the $25 to $35 million range previously provided. At the end of the first quarter of 2020, the company had cash on hand of $79 million and total debt equal to $1,973 million. This is compared to cash and debt levels equal to $112 million and $1,979 million, respectively, at the end of the fourth quarter of 2019. The company has generated the Cash flow from operations of $34 million in the first quarter of 2020 from $0.5 million in the first quarter of 2019, due to a improved working capital management. Capital expenditures were $32 million in the first quarter, versus $15 million in the fourth quarter of fiscal 2019, reflecting timing of capital projects and expenditures related to growth initiatives

FUL in the first quarter of FY 20 has reported the adjusted earnings per share of 34 cents, beating the analysts’ estimates for the adjusted earnings per share of 33 cents, according to analysts polled by FactSet. The company had reported the adjusted revenue growth of 35.9 percent to $646.6 million in the first quarter of FY 20, missing the analysts’ estimates for revenue of $649.7 million. Organic revenue, had fallen 1.3% versus last year. Organic revenue growth in Construction Adhesives (CA) was partially offset a decline in Engineering Adhesives (EA) and flat revenues in Hygiene, Health and Consumables Adhesives (HHC.) The decline in organic revenue was due to an impact on sales resulting from the COVID-19 pandemic. The company projects the shutdown in China after the outbreak impacted sales in region by approximately $15 million in the quarter, including an estimated $12 million in Engineering Adhesives and an estimated $3 million in HHC. The company’s adjusted gross profit margin of 26.5%, had fallen by 50 basis points versus last year.

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