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Why Is Silgan (SLGN) Up 3.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for Silgan Holdings (SLGN - Free Report) . Shares have added about 3.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Silgan due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Silgan Holdings reported adjusted earnings of 83 cents per share in second-quarter 2023, which missed the Zacks Consensus Estimate of adjusted earnings of 91 cents per share. The bottom line declined 24% year over year and lagged the company’s guidance of 85-95 cents per share.
Including one-time items, earnings were 71 cents per share, compared with 83 cents per share reported in the prior-year quarter.
Total revenues decreased 8% year over year to $1,427 million from the prior-year quarter’s $1,544 million. The top line missed the Zacks Consensus Estimate of $1,538 million. Low volumes impacted sales in the quarter.
Costs and Margins
In second-quarter 2023, the cost of goods sold decreased 7% year over year to $1,177 million. The gross profit decreased 8.7% to $250 million. The gross margin was 17.5%, compared with the prior-year quarter’s 17.7%.
Selling, general and administrative expenses were $102 million in the reported quarter, compared with the year-ago quarter’s $127 million. The company reported an operating income of $144 million in the quarter, compared with $158 million in the prior-year quarter.
Adjusted operating profit was $160.8 million in the second quarter of 2023, which was 14.4% lower than $187.8 million in the last year’s quarter. The adjusted operating margin was 11.3% in the reported quarter, compared with the prior-year quarter’s 12.2%.
Segmental Performances
Revenues in the Dispensing and Specialty Closures segment were down 7% year over year to $560 million in the second quarter. The figure came in lower than the Zacks Consensus Estimate of $592.6 million due to lower volume and mix. Inflated single-digit volume growth in higher value dispensing products were offset by double-digit declines in higher volume closures for food and beverage markets. Lower food and beverage closures volumes in Europe mainly dragged volumes in the quarter.
The operating income for the segment was $63.7 million in the second quarter of 2023, compared with $91.3 million in second-quarter 2022. The figure lagged the Zacks Consensus Estimate of $101 million. Labor challenges, which impacted output at a food and beverage closures facility in the United States, led to higher costs in the quarter. The segment’s adjusted operating income was $77 million, compared with $100 million in the prior-year period.
The Metal Containers segment’s revenues in the quarter declined 6% year over year to $711 million due to lower volumes. Soup volumes returned to a more normal seasonal pattern while pet food volumes continued to be strong. Revenues in the quarter fell short of the Zacks Consensus Estimate of $1,154 million.
The segment’s operating income in the quarter under review was $73.6 million, up 11% from the last year’s quarter on favorable price/cost that offset the impact of lower volumes. However, it came in lower than the consensus estimate of $118.3 million. Adjusted operating income for the segment amounted to $76 million, up 19% from the prior-year quarter.
In the Custom Containers segment, revenues were $156 million, compared with the year-ago quarter’s $187 million. The figure was also lower than the Zacks Consensus Estimate of $176 million. Operating income slumped 45% year over year to $17 million and came in lower than the consensus estimate of $23.3 million. The segment reported an adjusted operating income of $18.5 million, down from the previous year’s $30 million.
Financial Updates
The company had cash and cash equivalents of $237 million at the end of the first quarter of 2023, compared with $586 million at the end of 2022. The company used around $812 million in cash from operating activities in the first six-month period of 2023, compared with an outflow of $352 million in the last year’s comparable period.
2023 Outlook
Silgan expects 2023 adjusted EPS between $3.40 and $3.60, lower than its previous expectation in the range of $3.95 to $4.15.
For third-quarter 2023, Silgan anticipates adjusted EPS in the range of $1.10-$1.20. The company reported earnings of $1.28 per share in third-quarter 2022.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -15.89% due to these changes.
VGM Scores
Currently, Silgan has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Silgan has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Silgan (SLGN) Up 3.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Silgan Holdings (SLGN - Free Report) . Shares have added about 3.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Silgan due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Silgan Misses Q2 Earnings Estimates, Lowers 2023 View
Silgan Holdings reported adjusted earnings of 83 cents per share in second-quarter 2023, which missed the Zacks Consensus Estimate of adjusted earnings of 91 cents per share. The bottom line declined 24% year over year and lagged the company’s guidance of 85-95 cents per share.
Including one-time items, earnings were 71 cents per share, compared with 83 cents per share reported in the prior-year quarter.
Total revenues decreased 8% year over year to $1,427 million from the prior-year quarter’s $1,544 million. The top line missed the Zacks Consensus Estimate of $1,538 million. Low volumes impacted sales in the quarter.
Costs and Margins
In second-quarter 2023, the cost of goods sold decreased 7% year over year to $1,177 million. The gross profit decreased 8.7% to $250 million. The gross margin was 17.5%, compared with the prior-year quarter’s 17.7%.
Selling, general and administrative expenses were $102 million in the reported quarter, compared with the year-ago quarter’s $127 million. The company reported an operating income of $144 million in the quarter, compared with $158 million in the prior-year quarter.
Adjusted operating profit was $160.8 million in the second quarter of 2023, which was 14.4% lower than $187.8 million in the last year’s quarter. The adjusted operating margin was 11.3% in the reported quarter, compared with the prior-year quarter’s 12.2%.
Segmental Performances
Revenues in the Dispensing and Specialty Closures segment were down 7% year over year to $560 million in the second quarter. The figure came in lower than the Zacks Consensus Estimate of $592.6 million due to lower volume and mix. Inflated single-digit volume growth in higher value dispensing products were offset by double-digit declines in higher volume closures for food and beverage markets. Lower food and beverage closures volumes in Europe mainly dragged volumes in the quarter.
The operating income for the segment was $63.7 million in the second quarter of 2023, compared with $91.3 million in second-quarter 2022. The figure lagged the Zacks Consensus Estimate of $101 million. Labor challenges, which impacted output at a food and beverage closures facility in the United States, led to higher costs in the quarter. The segment’s adjusted operating income was $77 million, compared with $100 million in the prior-year period.
The Metal Containers segment’s revenues in the quarter declined 6% year over year to $711 million due to lower volumes. Soup volumes returned to a more normal seasonal pattern while pet food volumes continued to be strong. Revenues in the quarter fell short of the Zacks Consensus Estimate of $1,154 million.
The segment’s operating income in the quarter under review was $73.6 million, up 11% from the last year’s quarter on favorable price/cost that offset the impact of lower volumes. However, it came in lower than the consensus estimate of $118.3 million. Adjusted operating income for the segment amounted to $76 million, up 19% from the prior-year quarter.
In the Custom Containers segment, revenues were $156 million, compared with the year-ago quarter’s $187 million. The figure was also lower than the Zacks Consensus Estimate of $176 million. Operating income slumped 45% year over year to $17 million and came in lower than the consensus estimate of $23.3 million. The segment reported an adjusted operating income of $18.5 million, down from the previous year’s $30 million.
Financial Updates
The company had cash and cash equivalents of $237 million at the end of the first quarter of 2023, compared with $586 million at the end of 2022. The company used around $812 million in cash from operating activities in the first six-month period of 2023, compared with an outflow of $352 million in the last year’s comparable period.
2023 Outlook
Silgan expects 2023 adjusted EPS between $3.40 and $3.60, lower than its previous expectation in the range of $3.95 to $4.15.
For third-quarter 2023, Silgan anticipates adjusted EPS in the range of $1.10-$1.20. The company reported earnings of $1.28 per share in third-quarter 2022.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -15.89% due to these changes.
VGM Scores
Currently, Silgan has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Silgan has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.