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Why Is Sonoco (SON) Up 4.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Sonoco (SON - Free Report) . Shares have added about 4.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sonoco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Sonoco Earnings Top Estimates in Q1, Lowers '24 View
Sonoco 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.
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.
Segment Performances
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.
Cash & Debt Position
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.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months.
VGM Scores
Currently, Sonoco has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Sonoco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Sonoco (SON) Up 4.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Sonoco (SON - Free Report) . Shares have added about 4.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sonoco due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Sonoco Earnings Top Estimates in Q1, Lowers '24 View
Sonoco 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.
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.
Segment Performances
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.
Cash & Debt Position
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.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months.
VGM Scores
Currently, Sonoco has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Sonoco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.