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Berry Global (BERY) Q4 Earnings Beat, Revenues Decline Y/Y
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Berry Global Group, Inc. (BERY - Free Report) reported fourth-quarter fiscal 2022 (ended Sep 30, 2022) adjusted earnings (excluding 34 cents from non-recurring items) of $2.19 per share, which beat the Zacks Consensus Estimate of $2.15. The bottom line increased in double digits year over year due to lower costs.
Net sales of $3,421 million missed the Zacks Consensus Estimate of $3,682.6 million. The top line decreased 7% year over year, with a 2% decline in organic volumes.
In the fiscal fourth quarter, Berry Global’s cost of goods sold decreased 7.9% to $2,834 million. Selling, general and administrative expenses declined 7% to $185 million. Berry Global reported an operating EBITDA of $539 million, up 1.7% year over year. Adjusted operating income in the quarter increased 7.9% year over year to $340 million.
Berry Global Group, Inc. Price, Consensus and EPS Surprise
Consumer Packaging – International sales were $1,003 million, up 8% from the year-ago quarter’s level. The results benefited from effective pricing actions. Operating income of $98 million dipped nearly 4% year over year. The segment accounted for 29.3% of the quarter’s net sales.
Consumer Packaging – North America’s sales were $888 million, up slightly year over year due to increased selling prices. Demand was almost flat in the period. Operating income jumped 60% year over year to $103 million. The segment accounted for 26% of total net sales.
Revenues generated from Health, Hygiene & Specialties amounted to $738 million, down 6% year over year due to lower selling prices. Operating income of $44 million declined 42% year over year. The segment accounted for 21.6% of total net sales in the reported quarter.
Revenues from Engineered Materials fell 7% year over year to $792 million due to reduced demand. Operating income of $91 million jumped 30% year over year due to higher prices and improved sales mix, partly offset by reduced customer demand. The segment accounted for 23.1% of the quarter’s net sales.
Balance Sheet and Cash Flow
At the end of the fourth quarter of fiscal 2022, Berry Global had cash and cash equivalents of $1,410 million compared with $1,091 million at the end of fiscal 2021. Current and long-term debt totaled $9,255 million compared with $9,460 million at the end of fiscal 2021.
During fiscal 2022, Berry Global generated net cash of $1,563 million from operating activities compared with $1,580 million in the year-ago period. Capital expenditure totaled $687 million compared with $676 million in the year-ago quarter. Free cash flow at the end of the fiscal fourth quarter was $876 million compared with $904 million in the year-ago period.
BERY repurchased shares worth $709 million in fiscal 2022.
Fiscal 2023 Outlook
Berry Global expects adjusted earnings of $7.30-$7.80 per share for fiscal 2023. This indicates an 8% increase at the mid-point compared with the year-ago period. The Zacks Consensus Estimate for fiscal 2023 adjusted earnings per share stands at $7.90.
BERY expects cash flow from operations of $1.4-$1.5 billion for the current fiscal year. Free cash flow is estimated in the range of $800-$900 million. The company expects to repurchase shares worth $700 million in fiscal 2023. BERY has boosted its share repurchase program to $1 billion.
Dividend Initiation
Berry Global has initiated a quarterly cash dividend of 25 cents per share, payable to shareholders on Dec 15, of record as of Dec 1.
Zacks Rank & Key Picks
Berry Global currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked companies within the broader Industrial Products sector:
Enerpac Tool’s estimated earnings growth rate for the current fiscal year is 44.6%. Shares of the company have jumped 19.6% in the past six months.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently flaunts a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 24.8%, on average.
Applied Industrial has an estimated earnings growth rate of 14.3% for the current fiscal year. Shares of the company have gained 20.6% in the past six months.
IDEX Corporation (IEX - Free Report) presently has a Zacks Rank of 2 (Buy). IDEX pulled off a trailing four-quarter earnings surprise of 5.7% on average.
IDEX has an estimated earnings growth rate of 28.3% for the current year. Shares of the company have rallied 22.5% in the past six months.
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Berry Global (BERY) Q4 Earnings Beat, Revenues Decline Y/Y
Berry Global Group, Inc. (BERY - Free Report) reported fourth-quarter fiscal 2022 (ended Sep 30, 2022) adjusted earnings (excluding 34 cents from non-recurring items) of $2.19 per share, which beat the Zacks Consensus Estimate of $2.15. The bottom line increased in double digits year over year due to lower costs.
Net sales of $3,421 million missed the Zacks Consensus Estimate of $3,682.6 million. The top line decreased 7% year over year, with a 2% decline in organic volumes.
In the fiscal fourth quarter, Berry Global’s cost of goods sold decreased 7.9% to $2,834 million. Selling, general and administrative expenses declined 7% to $185 million. Berry Global reported an operating EBITDA of $539 million, up 1.7% year over year. Adjusted operating income in the quarter increased 7.9% year over year to $340 million.
Berry Global Group, Inc. Price, Consensus and EPS Surprise
Berry Global Group, Inc. price-consensus-eps-surprise-chart | Berry Global Group, Inc. Quote
Segmental Discussion
Consumer Packaging – International sales were $1,003 million, up 8% from the year-ago quarter’s level. The results benefited from effective pricing actions. Operating income of $98 million dipped nearly 4% year over year. The segment accounted for 29.3% of the quarter’s net sales.
Consumer Packaging – North America’s sales were $888 million, up slightly year over year due to increased selling prices. Demand was almost flat in the period. Operating income jumped 60% year over year to $103 million. The segment accounted for 26% of total net sales.
Revenues generated from Health, Hygiene & Specialties amounted to $738 million, down 6% year over year due to lower selling prices. Operating income of $44 million declined 42% year over year. The segment accounted for 21.6% of total net sales in the reported quarter.
Revenues from Engineered Materials fell 7% year over year to $792 million due to reduced demand. Operating income of $91 million jumped 30% year over year due to higher prices and improved sales mix, partly offset by reduced customer demand. The segment accounted for 23.1% of the quarter’s net sales.
Balance Sheet and Cash Flow
At the end of the fourth quarter of fiscal 2022, Berry Global had cash and cash equivalents of $1,410 million compared with $1,091 million at the end of fiscal 2021. Current and long-term debt totaled $9,255 million compared with $9,460 million at the end of fiscal 2021.
During fiscal 2022, Berry Global generated net cash of $1,563 million from operating activities compared with $1,580 million in the year-ago period. Capital expenditure totaled $687 million compared with $676 million in the year-ago quarter. Free cash flow at the end of the fiscal fourth quarter was $876 million compared with $904 million in the year-ago period.
BERY repurchased shares worth $709 million in fiscal 2022.
Fiscal 2023 Outlook
Berry Global expects adjusted earnings of $7.30-$7.80 per share for fiscal 2023. This indicates an 8% increase at the mid-point compared with the year-ago period. The Zacks Consensus Estimate for fiscal 2023 adjusted earnings per share stands at $7.90.
BERY expects cash flow from operations of $1.4-$1.5 billion for the current fiscal year. Free cash flow is estimated in the range of $800-$900 million. The company expects to repurchase shares worth $700 million in fiscal 2023. BERY has boosted its share repurchase program to $1 billion.
Dividend Initiation
Berry Global has initiated a quarterly cash dividend of 25 cents per share, payable to shareholders on Dec 15, of record as of Dec 1.
Zacks Rank & Key Picks
Berry Global currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked companies within the broader Industrial Products sector:
Enerpac Tool Group Corp. (EPAC - Free Report) delivered an average four-quarter earnings surprise of 3.4%. EPAC presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
Enerpac Tool’s estimated earnings growth rate for the current fiscal year is 44.6%. Shares of the company have jumped 19.6% in the past six months.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently flaunts a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 24.8%, on average.
Applied Industrial has an estimated earnings growth rate of 14.3% for the current fiscal year. Shares of the company have gained 20.6% in the past six months.
IDEX Corporation (IEX - Free Report) presently has a Zacks Rank of 2 (Buy). IDEX pulled off a trailing four-quarter earnings surprise of 5.7% on average.
IDEX has an estimated earnings growth rate of 28.3% for the current year. Shares of the company have rallied 22.5% in the past six months.