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Sealed Air (SEE) Beats on Q3 Earnings & Sales, Raises '21 View
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Sealed Air Corporation (SEE - Free Report) reported third-quarter 2021 adjusted earnings per share of 86 cents, beating the Zacks Consensus Estimate of 82 cents. The bottom line improved 4.8%, year over year.
Including special items, the company delivered net earnings per share of 71 cents compared with the prior-year quarter’s 85 cents.
Total revenues were up 14% year over year to $1,407 million in the reported quarter. The top line also beat the Zacks Consensus Estimate of $1,383 million.
Cost and Margins
Cost of sales climbed 20.4% year over year to $1,003 million. The gross profit came in at $404 million compared with the year-ago quarter’s $405 million. The gross margin contracted to 28.7% from the prior-year quarter’s 32.6%.
The SG&A expenses declined 4.5% to $190 million, year over year. The adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $271 million in the quarter, up 4% from the prior-year period. The adjusted EBITDA margin was 19.2% compared with the prior-year quarter’s 21%. The EBITDA margin was impacted by rising material and freight costs, partly offset by lower employee-related expenses and benefits related to an indirect tax recovery in Brazil.
Sealed Air Corporation Price, Consensus and EPS Surprise
Food: Net sales jumped 13%, year over year, to $797 million. The company witnessed strong demand for automation andimprovement in food service. The adjusted EBITDA was up 11%, year over year, to $169 million. Volume growth and productivity improvements were offset by negative price/cost related to higher input costs.
Protective: The segment reported net sales of $609 million during the quarter under review, up 14% from the prior-year period on continued demand in the automation and industrial markets. The adjusted EBITDA decreased 5.5% year over year to $103 million.
Financial Updates
Cash flow from operating activities was $378 million in the nine-month period ended on Sep 30, 2021 compared with the year-ago period’s $410 million.
The company paid cash dividends of $86 million during the first nine months of 2021 and repurchased shares worth $329 million.
As of Sep 30, 2021, Sealed Air’s net debt was $3.4 billion, up from $3.2 billion as of Dec 31, 2020. As of the end of the quarter, the company had $1.5 billion of liquidity available, which comprised $394 million in cash and $1.14 billion of undrawn, committed credit facilities.
2021 Guidance Updated
For 2021, Sealed Air expects net sales of $5.5 billion, indicating an increase of 12% as reported and 11% in constant dollars. Management projected net sales between $5.4 billion and $5.5 billion in its prior guidance. The company now expects adjusted EBITDA to lie between $1.12 billion and $1.14 billion for the current year. The adjusted earnings per share are now anticipated in the band of $3.50 to $3.60. The company had earlier provided a guidance range of $3.45-$3.60. Sealed Air projects free cash flow to be between $520 million and $540 million for the ongoing year.
Share Price Performance
So far this year, Sealed Air’s shares have gained 30.2%, outperforming the industry’s growth of 10.1%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Sealed Air currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
Sealed Air (SEE) Beats on Q3 Earnings & Sales, Raises '21 View
Sealed Air Corporation (SEE - Free Report) reported third-quarter 2021 adjusted earnings per share of 86 cents, beating the Zacks Consensus Estimate of 82 cents. The bottom line improved 4.8%, year over year.
Including special items, the company delivered net earnings per share of 71 cents compared with the prior-year quarter’s 85 cents.
Total revenues were up 14% year over year to $1,407 million in the reported quarter. The top line also beat the Zacks Consensus Estimate of $1,383 million.
Cost and Margins
Cost of sales climbed 20.4% year over year to $1,003 million. The gross profit came in at $404 million compared with the year-ago quarter’s $405 million. The gross margin contracted to 28.7% from the prior-year quarter’s 32.6%.
The SG&A expenses declined 4.5% to $190 million, year over year. The adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $271 million in the quarter, up 4% from the prior-year period. The adjusted EBITDA margin was 19.2% compared with the prior-year quarter’s 21%. The EBITDA margin was impacted by rising material and freight costs, partly offset by lower employee-related expenses and benefits related to an indirect tax recovery in Brazil.
Sealed Air Corporation Price, Consensus and EPS Surprise
Sealed Air Corporation price-consensus-eps-surprise-chart | Sealed Air Corporation Quote
Segment Performance
Food: Net sales jumped 13%, year over year, to $797 million. The company witnessed strong demand for automation andimprovement in food service. The adjusted EBITDA was up 11%, year over year, to $169 million. Volume growth and productivity improvements were offset by negative price/cost related to higher input costs.
Protective: The segment reported net sales of $609 million during the quarter under review, up 14% from the prior-year period on continued demand in the automation and industrial markets. The adjusted EBITDA decreased 5.5% year over year to $103 million.
Financial Updates
Cash flow from operating activities was $378 million in the nine-month period ended on Sep 30, 2021 compared with the year-ago period’s $410 million.
The company paid cash dividends of $86 million during the first nine months of 2021 and repurchased shares worth $329 million.
As of Sep 30, 2021, Sealed Air’s net debt was $3.4 billion, up from $3.2 billion as of Dec 31, 2020. As of the end of the quarter, the company had $1.5 billion of liquidity available, which comprised $394 million in cash and $1.14 billion of undrawn, committed credit facilities.
2021 Guidance Updated
For 2021, Sealed Air expects net sales of $5.5 billion, indicating an increase of 12% as reported and 11% in constant dollars. Management projected net sales between $5.4 billion and $5.5 billion in its prior guidance. The company now expects adjusted EBITDA to lie between $1.12 billion and $1.14 billion for the current year. The adjusted earnings per share are now anticipated in the band of $3.50 to $3.60. The company had earlier provided a guidance range of $3.45-$3.60. Sealed Air projects free cash flow to be between $520 million and $540 million for the ongoing year.
Share Price Performance
So far this year, Sealed Air’s shares have gained 30.2%, outperforming the industry’s growth of 10.1%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Sealed Air currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the Industrial Products sector include Deere & Company (DE - Free Report) , Worthington Industries, Inc. (WOR - Free Report) and DXP Enterprises, Inc. (DXPE - Free Report) . All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Deere has an anticipated earnings growth rate of 117.6% for fiscal 2021. The company’s shares have increased 34.4%, year to date.
Worthington has an estimated earnings growth rate of 3.6% for fiscal 2022. Year to date, the company’s shares have gained 9.8%.
DXP Enterprises has a projected earnings growth rate of 77.6% for the current year. The stock has appreciated around 49%, so far this year.