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Sonoco (SON) Earnings & Sales Beat Estimates in Q4, Up Y/Y
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Sonoco Products Company (SON - Free Report) reported adjusted earnings per share (EPS) of 90 cents in fourth-quarter 2021, beating the Zacks Consensus Estimate of 89 cents. The figure met the upper end of the company’s guidance of 84-90 cents. The bottom line increased 9.8% from the prior-year quarter’s levels, aided by benefits from positive price/cost, lower tax rate and strong productivity, which were slightly offset by year-over-year fewer shipping days and the impact from the divestiture of the company’s former display and packaging businesses.
Including one-time items, the company reported EPS of 66 cents against the year-ago quarter’s loss per share of 12 cents.
Sonoco’s net sales were $1.44 billion, beating the Zacks Consensus Estimate of $1.38 billion. The top line rose 4.6% on a year-over-year basis, driven by higher selling prices to combat inflation. The disposition of the company's European and U.S. display and packaging contract businesses in November 2020 and April 2021 had a negative impact.
Operational Update
Cost of sales was $1,176 million, 6.8% higher than the year-earlier quarter’s $1,101 million. Gross profit during the reported quarter totaled $264 million compared with the prior-year quarter’s $275 million. Gross margin came in at 18.3% compared with the year-ago quarter’s 19.9%.
Selling, general and administrative expenses amounted to $154 million, down 2.2% year over year. The adjusted operating income came in at $125 million during the reported quarter compared with the prior-year quarter’s $126 million. The operating margin came in at 8.7%, down from the year-ago quarter’s 9.2%.
Sonoco Products Company Price, Consensus and EPS Surprise
The Consumer Packaging segment’s net sales were up 3.3% year over year to $589 million, driven by higher selling prices, partly offset by fewer shipping days in the quarter. The operating profit amounted to $56 million, down 14.3% from the prior-year quarter’s levels as strong productivity gains were offset by a negative price/cost relationship stemming from raw material cost inflation coupled with the impact of fewer shipping days.
Net sales in the Industrial Paper Packaging segment totaled $655 million, reflecting year-over-year growth of 20.5% on higher selling prices, partly offset by fewer shipping days in the quarter. The operating profit totaled $57 million, reflecting a 33% year-over-year improvement on a positive price/cost relationship, partly offset by the impact of fewer shipping days.
Sales for the All Other segment, which comprises protective, healthcare, retail and industrial plastics units, dropped 25.7% year over year to $195 million. The downside was primarily caused by the disposition of the display and packaging businesses and fewer shipping days. The operating profit for the segment came in at $11.2 million compared with the year-ago quarter’s $17.2 million.
Financial Performance
Sonoco reported cash and cash equivalents of $171 million at the end of 2021 compared with $565 million at 2020-end. The company generated cash flow from operating activities of around $299 million in 2021 compared with $706 million in 2020. Free cash flow was $56 million in 2021 compared with $524 million in 2020.
As of Dec 31, 2021, the total debt was $1.61 billion compared with $1.70 billion as of Dec 31, 2020. At the end of 2021, Sonoco’s total debt to total capital was 46.5% compared with 47.1% at the end of 2020.
2021 Performance
Sonoco reported an adjusted EPS of $3.55 in 2021 compared with $3.41 reported in the prior year. Earnings were in line with the Zacks Consensus Estimate. Including one-time items, the company incurred a loss of 86 cents per share against earnings of $2.05 in 2020.
Sales were up 6.7% year over year to $5.59 billion. The top line surpassed the Zacks Consensus Estimate of $5.53 billion.
Guidance
Sonoco projects first-quarter 2022 adjusted EPS between $1.25 and $1.35.
For 2022, the company expects an adjusted EPS of $4.60-$4.80. Operating cash flow for the year is expected in the range of $690-$740 million and free cash flow is expected between $365 million and $415 million. This includes a positive impact from the Ball Metalpack acquisition.
Price Performance
Sonoco’s shares have lost 4.5% in the past year compared with the industry’s growth of 10%.
Dover’s fourth-quarter 2021 adjusted EPS increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.
Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4%. DOV’s shares have rallied around 44.5% in a year.
Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.
Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 19.7%.
Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.
Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 36% in a year.
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Sonoco (SON) Earnings & Sales Beat Estimates in Q4, Up Y/Y
Sonoco Products Company (SON - Free Report) reported adjusted earnings per share (EPS) of 90 cents in fourth-quarter 2021, beating the Zacks Consensus Estimate of 89 cents. The figure met the upper end of the company’s guidance of 84-90 cents. The bottom line increased 9.8% from the prior-year quarter’s levels, aided by benefits from positive price/cost, lower tax rate and strong productivity, which were slightly offset by year-over-year fewer shipping days and the impact from the divestiture of the company’s former display and packaging businesses.
Including one-time items, the company reported EPS of 66 cents against the year-ago quarter’s loss per share of 12 cents.
Sonoco’s net sales were $1.44 billion, beating the Zacks Consensus Estimate of $1.38 billion. The top line rose 4.6% on a year-over-year basis, driven by higher selling prices to combat inflation. The disposition of the company's European and U.S. display and packaging contract businesses in November 2020 and April 2021 had a negative impact.
Operational Update
Cost of sales was $1,176 million, 6.8% higher than the year-earlier quarter’s $1,101 million. Gross profit during the reported quarter totaled $264 million compared with the prior-year quarter’s $275 million. Gross margin came in at 18.3% compared with the year-ago quarter’s 19.9%.
Selling, general and administrative expenses amounted to $154 million, down 2.2% year over year. The adjusted operating income came in at $125 million during the reported quarter compared with the prior-year quarter’s $126 million. The operating margin came in at 8.7%, down from the year-ago quarter’s 9.2%.
Sonoco Products Company Price, Consensus and EPS Surprise
Sonoco Products Company price-consensus-eps-surprise-chart | Sonoco Products Company Quote
Segment Performance
The Consumer Packaging segment’s net sales were up 3.3% year over year to $589 million, driven by higher selling prices, partly offset by fewer shipping days in the quarter. The operating profit amounted to $56 million, down 14.3% from the prior-year quarter’s levels as strong productivity gains were offset by a negative price/cost relationship stemming from raw material cost inflation coupled with the impact of fewer shipping days.
Net sales in the Industrial Paper Packaging segment totaled $655 million, reflecting year-over-year growth of 20.5% on higher selling prices, partly offset by fewer shipping days in the quarter. The operating profit totaled $57 million, reflecting a 33% year-over-year improvement on a positive price/cost relationship, partly offset by the impact of fewer shipping days.
Sales for the All Other segment, which comprises protective, healthcare, retail and industrial plastics units, dropped 25.7% year over year to $195 million. The downside was primarily caused by the disposition of the display and packaging businesses and fewer shipping days. The operating profit for the segment came in at $11.2 million compared with the year-ago quarter’s $17.2 million.
Financial Performance
Sonoco reported cash and cash equivalents of $171 million at the end of 2021 compared with $565 million at 2020-end. The company generated cash flow from operating activities of around $299 million in 2021 compared with $706 million in 2020. Free cash flow was $56 million in 2021 compared with $524 million in 2020.
As of Dec 31, 2021, the total debt was $1.61 billion compared with $1.70 billion as of Dec 31, 2020. At the end of 2021, Sonoco’s total debt to total capital was 46.5% compared with 47.1% at the end of 2020.
2021 Performance
Sonoco reported an adjusted EPS of $3.55 in 2021 compared with $3.41 reported in the prior year. Earnings were in line with the Zacks Consensus Estimate. Including one-time items, the company incurred a loss of 86 cents per share against earnings of $2.05 in 2020.
Sales were up 6.7% year over year to $5.59 billion. The top line surpassed the Zacks Consensus Estimate of $5.53 billion.
Guidance
Sonoco projects first-quarter 2022 adjusted EPS between $1.25 and $1.35.
For 2022, the company expects an adjusted EPS of $4.60-$4.80. Operating cash flow for the year is expected in the range of $690-$740 million and free cash flow is expected between $365 million and $415 million. This includes a positive impact from the Ball Metalpack acquisition.
Price Performance
Sonoco’s shares have lost 4.5% in the past year compared with the industry’s growth of 10%.
Zacks Rank and Stocks to Consider
Sonoco currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector include Dover Corporation (DOV - Free Report) , Silgan Holdings Inc. (SLGN - Free Report) and Applied Industrial Technologies, Inc. (AIT - Free Report) , each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dover’s fourth-quarter 2021 adjusted EPS increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.
Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4%. DOV’s shares have rallied around 44.5% in a year.
Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.
Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 19.7%.
Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.
Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 36% in a year.