Shares of Fortune Brands Home & Security (FBHS -1.12%), a manufacturer of plumbing fixtures, cabinets, doors, security products, and other home hardware, jumped as high as 12% Friday morning before giving back some gains, after the company reported strong first-quarter results.
Fortune Brands sales increased 6%, compared with the prior year, to $1.4 billion, topping analysts' estimates. Adjusted earnings per share checked in at $0.81, well above the prior year's $0.63, and ahead of analysts' estimates. The better-than-expected top line was driven by all segments: cabinet sales jumped 8%, while plumbing and doors & security sales jumped 2% and 6%, respectively.
"After a very strong start to the year, the virus has made demand expectations uncertain," CFO Patrick Hallinan said in a press release. "In addition to expense and cash management improvement initiatives being pursued throughout the Company, it was prudent to add further financial flexibility and liquidity during this uncertain time."
Despite a solid first quarter, investors would be wise to temper expectations for the second quarter since it will feel the full force of COVID-19 and the economic slowdown that is attached to the pandemic. On the bright side, the company has a strong balance sheet, with $360 million in cash and $1 billion of liquidity from its revolving credit facility.