Investors braced for a bumpy ride ahead of H.B. Fuller's (NYSE: FUL) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings next Wednesday, June 22. H.B. Fuller is a formulator, manufacturer, and marketer of adhesives, sealants, paints, and other specialty chemical products.
What analysts say:
- Buy, sell, or hold?: Analysts think investors should stand pat on H.B. Fuller -- six of seven analysts rate the stock a hold. Only one analyst thinks the stock is a buy. While analysts still rate the stock a Hold, they are a little more optimistic about it compared to three months ago.
- Revenue Forecasts: On average, analysts predict $383.2 million in revenue this quarter. That would represent a rise of 10.2% from the year-ago quarter.
- Wall St. Earnings Expectations: The average analyst is estimating earnings of 46 cents per share. Estimates range from 43 cents to 48 cents.
What our community says:
CAPS All Stars are solidly behind the stock with 100% assigning it an "outperform" rating. The community at large concurs with the All Stars with 91.2% giving it a rating of "outperform." Fools are keen on H.B. Fuller, though the message boards have been quiet lately with only 21 posts in the past 30 days. The bullish CAPS rating of five out of five stars for H.B. Fuller is right on par with Fool enthusiasm for the company.
Management:
Revenue has now gone up for three straight quarters. In the first quarter of the last fiscal year, revenue rose 9.7% to $339.5 million while the figure rose 5.5% in the fourth quarter of the last fiscal year from the year earlier. While the company has been profitable for the last eight quarters, income has fallen year over year by an average of 29.7% over the past four quarters. The quarter hit the hardest was the third quarter of the last fiscal year, which saw a 46.4% drop. The company's gross margin shrank by three percentage points in the last quarter. Revenue rose 9.7% while cost of sales rose 14.6% to $242.6 million from a year earlier.
Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross and net margins over the past four quarters.
| Quarter | Q1 | Q4 | Q3 | Q2 |
| Gross Margin | 28.5% | 28.3% | 28.4% | 29.1% |
| Net Margin | 4.2% | 6.1% | 5.6% | 3.2% |
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