A month has gone by since the last earnings report for H. B. Fuller (FUL). Shares have lost about 11% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is H. B. Fuller due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.
Key highlights
H.B. Fuller logged earnings (as reported) of $1.23 per share for the second quarter of fiscal 2026 (ended May 30, 2026), compared with 76 cents reported a year ago.
Barring one-time items, adjusted earnings for the quarter were $1.41 per share, up 19% year over year. It beat the Zacks Consensus Estimate of $1.37.
The company posted revenues of $950.3 million, up around 6% year over year. It surpassed the Zacks Consensus Estimate of $927 million. Organic growth was up 2.6%.
Adjusted EBITDA was $181 million, up 9% year over year, with a margin of 19.1% versus 18.4% a year ago.
Revenue growth was driven by pricing and currency, offsetting modest volume weakness. Margin expansion in the quarter reflected realized pricing and Quantum Leap restructuring, partially offset by higher variable compensation and currency impacts.
Segment Performance
HHC: Revenues were $421.9 million with organic revenue up 3% year over year. Adjusted EBITDA was $75.6M (up 22% y/y) with a margin of 17.9%, up 230 basis points (bps). Strength was seen in medical, tape & label and end-of-line packaging, offset by weak flexible packaging.
EA: Revenues were $283.2 million with organic growth of roughly 5% excluding solar exit. Aerospace was up 30% while electronics and general industries rose by double digits. Automotive declined by mid-single digits. Adjusted EBITDA was $63.5 million (flat year over year), with a margin of 22.4% (down 50 bps) due to higher variable comparisons.
BAS: Revenues were $245.2 million with organic growth of 6%. Adjusted EBITDA of $41.4 million rose 10% year over year with a margin of 16.9% (up 20 bps), led by glass and infrastructure/mechanical strength.
Cash Flow, Balance Sheet, Capital Allocation
Operating cash flow was $121 million (a second-quarter record), supporting roughly 750,000 share repurchases in the quarter. Net leverage improved to 3.1x. Management continues Quantum Leap restructuring and Project ONE ERP, which are contributing to efficiency and margin gains.
Guidance
The company expects fiscal 2026 (ex-AMS) net revenues to be up mid-single digits with organic growth of low single digits. Currency impacts are expected to be positive 1-2%.
Adjusted EBITDA is projected to be $650-$675 million. Adjusted earnings per share for fiscal 2026 are now forecast to be $4.60-$4.90.
Cash flow from operations for fiscal 2026 is expected to be in the range of $300 million to $325 million, weighted to the second half.
Net revenues for the fiscal third quarter are projected to rise mid-single digits. The company sees adjusted EBITDA of $180-$190 million for the quarter.
Management expects pricing in high-single-digits in the second half and volumes down low- to mid-single-digits. BAS is positioned for a stronger second half, EA is expected to improve as the solar exit laps, while HHC is more exposed to consumer softness. The proposed AMS acquisition is excluded from fiscal 2026 guidance.Â
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, H. B. Fuller has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock has a score of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise H. B. Fuller has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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