H.B. Fuller Company (NYSE:FUL) stock rose 4.44% (As on September 28, 11:22:12 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the third quarter of FY 23. Organic revenue declined 7.4% year-on-year, driven by lower volume, offset somewhat by favorable pricing. Volume declined 8.0%, driven by customer destocking actions, principally in Hygiene, Health, and Consumable Adhesives, and generally slower industrial demand across all three global business units. Volume development in the third quarter improved significantly versus the second quarter, when volume declined 14.2% year-on-year. Pricing actions favorably impacted organic growth by 0.6 percentage points. Foreign currency translation reduced net revenue growth by 1.7 percentage points and acquisitions increased net revenue growth by 4.8 percentage points. Adjusted net income attributable to H.B. Fuller for the third quarter of fiscal 2023 was $59 million.

Moreover, adjusted gross profit was $270 million. Adjusted gross profit margin of 30.0% increased 350 basis points year-on-year. Adjusted EBITDA in the third quarter of fiscal 2023 was $156 million, up 13.1% year-on-year. Adjusted EBITDA margin increased 270 basis points year-on-year to 17.3%, driven by the combined impact of pricing and raw material cost actions versus the prior year’s third quarter, as well as restructuring savings, partially offset by the impacts of lower volume and wage and other inflation. Net debt at the end of the third quarter of fiscal 2023 was $1,790 million, up $11 million sequentially versus the second quarter and down $67 million year-on-year. The sequential increase in net debt was driven by acquisition activity during the third quarter, offset by improved cash flow from operations. Cash flow from operations in the third quarter was $108 million, up $50 million year-on-year, reflecting improving margins and lower net working capital requirements.

FUL in the third quarter of FY 23 has reported the adjusted earnings per share of $1.06, missing the analysts’ estimates for the adjusted earnings per share of $1.14, according to analysts polled by FactSet. The company had reported 4.3 percent fall in the adjusted revenue to $900.6 million in the third quarter of FY 23, missing the analysts’ estimates for revenue of $954 million. The company now expect actions from the previously announced, and subsequently expanded, strategic restructuring to generate between $40 and $45 million in annual pre-tax run-rate cost savings, up from the original estimate of $30 to $35 million in annual pre-tax run-rate savings.