Yahoo Finance Sonoco (SON) Earnings Top Estimates in Q1, Lowers '24 View
Sonoco Products Company SON reported adjusted earnings per share of $1.12 in the first quarter of 2024, beating the Zacks Consensus Estimate of $1.08. The figure was within the company’s guidance of $1.05-$1.15. The bottom line fell 20% from the prior-year quarter.
Including one-time items, the company reported earnings of 66 cents, which compared unfavorably with the year-ago quarter’s $1.50.
Sonoco’s net sales were $1.64 billion, missing the Zacks Consensus Estimate of $1.69 billion. The top line fell 5% year over year on lower pricing. Overall volumes remained flat as lower volumes offset the gains from acquisitions.
Sonoco Products Company Price, Consensus and EPS Surprise
Sonoco Products Company price-consensus-eps-surprise-chart | Sonoco Products Company Quote
Operational Update
The cost of sales was $1.3 billion, 4% lower than the year-earlier quarter. Gross profit in the reported quarter totaled $338 million compared with the prior-year quarter’s $374 million. The gross margin came in at 20.6% compared with the year-ago quarter’s 21.6%.
Selling, general and administrative expenses amounted to $193 million, up 3% year over year. Adjusted operating income was $176 million compared with the prior-year quarter’s $213 million.
Segmental Performance
The Consumer Packaging segment’s net sales declined 5% year over year to $911 million, as volumes were impacted by lower consumer purchases. The segment’s reported revenues topped the Zacks Consensus Estimate of $902 million. Operating profit amounted to $93 million, down 4% from the prior-year quarter. The reported figure topped the estimate of $87 million.
Net sales in the Industrial Paper Packaging segment were $593 million, reflecting a year-over-year dip of 4% due to a low volume and mix. The Zacks Consensus Estimate for the segment’s quarterly sales was $591 million. Operating profit totaled $66 million, reflecting a 30% year-over-year fall. The figure beat the consensus estimate of $65 million.
Sales for the All Other segment, which comprises protective, healthcare, retail and industrial plastics units, were $134 million, down 14% year over year. The reported figure missed the consensus estimate of $195 million. Operating profit for the segment totaled $17 million compared with the year-ago quarter’s $23 million. The reported figure missed the estimate of $23 million.
Financial Performance
Sonoco reported cash and cash equivalents of $172 million at the end of Mar 31, 2024, compared with $152 million at the end of Dec 31, 2023. The company generated cash flow from operating activities of $166 million in the first quarter of 2024 compared with $98 million in the prior year quarter.
As of Mar 31, 2024, the total debt was $3.1 billion, flat with Dec 31, 2023.
Q2 & 2024 Guidance
Sonoco projects second-quarter 2024 adjusted earnings per share (EPS) between $1.25 and $1.35.
The company lowered its adjusted EPS guidance for 2024 to $5.00-$5.30, from the previously stated $5.10-$5.40.
Adjusted EBITDA is expected between $1.05 billion and $1.10 billion, The operating cash flow for the year is expected between $650 million and $750 million.
Price Performance
SON shares have lost 2.9% in the past year against the industry’s growth of 11.7%.
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Zacks Rank
Sonoco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Packaging Stocks in Q1
Packaging Corporation of America PKG reported an adjusted EPS of $1.72 in the first quarter of 2024, beating the Zacks Consensus Estimate of $1.63. The bottom line decreased 22% year over year mainly due to lower prices and mix in the Packaging and Paper segments. These were partially offset by higher volumes in the Packaging and Paper segments.
PKG’s sales in the quarter rose 0.2% year over year to $1.98 billion. The top line surpassed the consensus estimate of $1.91 billion.
Amcor Plc AMCR reported a third-quarter fiscal 2024 (ended Mar 31, 2024) adjusted EPS of approximately 18 cents, which beat the Zacks Consensus Estimate of 17 cents. This represents a 1.7% increase from the year-ago quarter, primarily attributed to the realization of benefits from structural cost initiatives. AMCR has also delivered a turnaround performance from the four consecutive quarters of decline in earnings.
Amcor’s total revenues fell 7% year over year to $3.4 billion. The top line missed the Zacks Consensus Estimate of $3.53 billion. The price/mix had an unfavorable impact of around 3% on sales. Volume was down 4% from the year-ago quarter due to weak demand in healthcare categories and the North America beverage business.
Sealed Air Corporation SEE reported a first-quarter 2024 adjusted EPS of 78 cents, which surpassed the Zacks Consensus Estimate of 53 cents. The bottom line increased 5% year over year.
Sealed Air’s total revenues were $1.33 billion in the quarter, which beat the Zacks Consensus Estimate of $1.28 billion. The figure was down 1.4% from $1.35 billion in the first quarter of 2023.
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