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Amcor (AMCR) Down 0.7% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Amcor (AMCR - Free Report) . Shares have lost about 0.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Amcor due for a breakout? 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 drivers.
Amcor Q3 Earnings Beat, Revenues Dip Y/Y on Low Volumes
Amcor reported third-quarter fiscal 2024 adjusted earnings per share (EPS) of approximately 18 cents, which beat the Zacks Consensus Estimate of 17 cents. This represents a 1.7% increase from the year-ago quarter, marking a return to growth after four consecutive quarters of decline. The growth is primarily attributed to the realization of benefits from structural cost initiatives.
Including special items, the company reported earnings per share (EPS) of 13 cents compared with 12 cents in the year-ago quarter.
Total revenues fell 7% year over year to $3.4 billion. The top line missed the Zacks Consensus Estimate of $3.53 billion.
The price/mix had an unfavorable impact of around 3% on sales. Volume was down 4% from the year-ago quarter owing to weak demand in healthcare categories and the North America beverage business. Acquisitions contributed 1% to growth. A 1% favorable impact of movements in foreign exchange rates was offset by a 2% impact of pass-through of lower raw material costs.
Although volume growth remained negative, it was better than expected and improved from the 10% decline reported in the second quarter of fiscal 2024.
Cost and Margins
The cost of sales was down 9% year over year to $2.7 billion. Gross profit rose 3% year over year to $692 million. The gross margin was 20.3% compared with the year-ago quarter’s 18.4%.
SG&A expenses were $330 million, reflecting an increase of 4% year over year. Adjusted operating income was $397 million, up 4% from $382 million in the year-ago quarter. Strong cost performance and benefits from restructuring initiatives helped offset the impact of lower volumes and unfavorable impacts from price/mix.
The adjusted operating margin was 11.6% compared with 10.4% in the year-ago quarter. Adjusted EBITDA in the quarter was $499 million compared with $484 million in the prior-year quarter.
Segment Performances
Flexibles: Net sales decreased 7% year over year to $2.6 billion. Volume was down 2% year over year due to destocking in healthcare categories and price/mix was an unfavorable 4%.
The segment’s adjusted operating income moved up 6% year over year to $358 million reflecting gains from strong cost performance and restructuring actions.
Rigid Packaging: The segment reported net sales of $813 million in the quarter, down 8% from the year-ago quarter. Volume was down 8% year over year reflecting lower beverage volumes amid weak demand in key categories. This was somewhat offset by a favorable price/mix impact of 1%.
Adjusted operating income was $71 million, up 3% year over year as favorable cost performance helped offset the impact of lower volumes.
Cash Flow & Balance Sheet Updates
As of the end of third-quarter fiscal 2024, Amcor had $457 million of cash and cash equivalents compared with $689 million as of fiscal 2023 end. The company generated $378 million of cash in operating activities in the first nine-month period of fiscal 2024 compared with $329 million in the year-ago comparable period.
As of Mar 31, 2024, Amcor’s net debt totaled $6.7 billion, up from $6.1 billion as of Jun 30, 2023.
Amcor returned $572 million to shareholders in the nine-month period ended Mar 31, 2024, through dividends and share repurchases. It has targeted total share repurchases of $70 million for fiscal 2024. Amcor’s board of directors had earlier raised its quarterly cash dividend to 12.5 cents per share from the previous payout of 12 cents per share.
FY24 Guidance
The company updated its adjusted EPS to 68.5-71 cents from its prior stated 67-71 cents for fiscal 2024. AMCR projects an adjusted free cash flow of $850-$950 million for fiscal 2024.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Amcor has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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
Amcor has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Amcor is part of the Zacks Containers - Paper and Packaging industry. Over the past month, Packaging Corp. (PKG - Free Report) , a stock from the same industry, has gained 2.9%. The company reported its results for the quarter ended March 2024 more than a month ago.
Packaging Corp. reported revenues of $1.98 billion in the last reported quarter, representing a year-over-year change of +0.2%. EPS of $1.72 for the same period compares with $2.20 a year ago.
Packaging Corp. is expected to post earnings of $2.10 per share for the current quarter, representing a year-over-year change of -9.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Packaging Corp. Also, the stock has a VGM Score of C.
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Amcor (AMCR) Down 0.7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Amcor (AMCR - Free Report) . Shares have lost about 0.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Amcor due for a breakout? 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 drivers.
Amcor Q3 Earnings Beat, Revenues Dip Y/Y on Low Volumes
Amcor reported third-quarter fiscal 2024 adjusted earnings per share (EPS) of approximately 18 cents, which beat the Zacks Consensus Estimate of 17 cents. This represents a 1.7% increase from the year-ago quarter, marking a return to growth after four consecutive quarters of decline. The growth is primarily attributed to the realization of benefits from structural cost initiatives.
Including special items, the company reported earnings per share (EPS) of 13 cents compared with 12 cents in the year-ago quarter.
Total revenues fell 7% year over year to $3.4 billion. The top line missed the Zacks Consensus Estimate of $3.53 billion.
The price/mix had an unfavorable impact of around 3% on sales. Volume was down 4% from the year-ago quarter owing to weak demand in healthcare categories and the North America beverage business. Acquisitions contributed 1% to growth. A 1% favorable impact of movements in foreign exchange rates was offset by a 2% impact of pass-through of lower raw material costs.
Although volume growth remained negative, it was better than expected and improved from the 10% decline reported in the second quarter of fiscal 2024.
Cost and Margins
The cost of sales was down 9% year over year to $2.7 billion. Gross profit rose 3% year over year to $692 million. The gross margin was 20.3% compared with the year-ago quarter’s 18.4%.
SG&A expenses were $330 million, reflecting an increase of 4% year over year. Adjusted operating income was $397 million, up 4% from $382 million in the year-ago quarter. Strong cost performance and benefits from restructuring initiatives helped offset the impact of lower volumes and unfavorable impacts from price/mix.
The adjusted operating margin was 11.6% compared with 10.4% in the year-ago quarter. Adjusted EBITDA in the quarter was $499 million compared with $484 million in the prior-year quarter.
Segment Performances
Flexibles: Net sales decreased 7% year over year to $2.6 billion. Volume was down 2% year over year due to destocking in healthcare categories and price/mix was an unfavorable 4%.
The segment’s adjusted operating income moved up 6% year over year to $358 million reflecting gains from strong cost performance and restructuring actions.
Rigid Packaging: The segment reported net sales of $813 million in the quarter, down 8% from the year-ago quarter. Volume was down 8% year over year reflecting lower beverage volumes amid weak demand in key categories. This was somewhat offset by a favorable price/mix impact of 1%.
Adjusted operating income was $71 million, up 3% year over year as favorable cost performance helped offset the impact of lower volumes.
Cash Flow & Balance Sheet Updates
As of the end of third-quarter fiscal 2024, Amcor had $457 million of cash and cash equivalents compared with $689 million as of fiscal 2023 end. The company generated $378 million of cash in operating activities in the first nine-month period of fiscal 2024 compared with $329 million in the year-ago comparable period.
As of Mar 31, 2024, Amcor’s net debt totaled $6.7 billion, up from $6.1 billion as of Jun 30, 2023.
Amcor returned $572 million to shareholders in the nine-month period ended Mar 31, 2024, through dividends and share repurchases. It has targeted total share repurchases of $70 million for fiscal 2024. Amcor’s board of directors had earlier raised its quarterly cash dividend to 12.5 cents per share from the previous payout of 12 cents per share.
FY24 Guidance
The company updated its adjusted EPS to 68.5-71 cents from its prior stated 67-71 cents for fiscal 2024. AMCR projects an adjusted free cash flow of $850-$950 million for fiscal 2024.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Amcor has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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
Amcor has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Amcor is part of the Zacks Containers - Paper and Packaging industry. Over the past month, Packaging Corp. (PKG - Free Report) , a stock from the same industry, has gained 2.9%. The company reported its results for the quarter ended March 2024 more than a month ago.
Packaging Corp. reported revenues of $1.98 billion in the last reported quarter, representing a year-over-year change of +0.2%. EPS of $1.72 for the same period compares with $2.20 a year ago.
Packaging Corp. is expected to post earnings of $2.10 per share for the current quarter, representing a year-over-year change of -9.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Packaging Corp. Also, the stock has a VGM Score of C.