Today I will examine HB. Fuller Company’s (NYSE:FUL) latest earnings update (03 March 2018) and compare these figures against its performance over the past couple of years, in addition to how the rest of FUL’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for H.B. Fuller
How Well Did FUL Perform?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend enables me to assess different stocks on a similar basis, using the latest information. For H.B. Fuller, its most recent earnings (trailing twelve month) is US$91.13M, which, relative to the previous year’s level, has fallen by -24.09%. Given that these figures may be relatively short-term thinking, I have calculated an annualized five-year figure for H.B. Fuller’s earnings, which stands at US$83.74M This means that even though earnings growth was negative from last year, over time, H.B. Fuller’s profits have been increasing on average.
What’s the driver of this growth? Let’s take a look at whether it is merely a result of industry tailwinds, or if H.B. Fuller has seen some company-specific growth. The climb in earnings seems to be supported by a substantial top-line increase overtaking its growth rate of costs. Though this resulted in a margin contraction, it has made H.B. Fuller more profitable. Eyeballing growth from a sector-level, the US chemicals industry has been growing its average earnings by double-digit 14.36% over the prior twelve months, and a more subdued 6.34% over the previous five years. This suggests that any uplift the industry is profiting from, H.B. Fuller has not been able to reap as much as its average peer.
What does this mean?
H.B. Fuller’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors affecting its business. You should continue to research H.B. Fuller to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for FUL’s future growth? Take a look at our free research report of analyst consensus for FUL’s outlook.
- 2. Financial Health: Is FUL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 03 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.