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Sonoco (SON) Earnings Top Estimates in Q2, Sales Dip Y/Y
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Sonoco Products Company (SON - Free Report) reported adjusted earnings per share (EPS) of $1.28 in second-quarter 2024, beating the Zacks Consensus Estimate of $1.26. The figure was within the company’s guidance of $1.25-$1.35. The bottom line fell 7% from the prior-year quarter.
Including one-time items, the company reported an EPS of 92 cents compared with the year-ago quarter’s $1.16.
Sonoco’s net sales were $1.62 billion, which missed the Zacks Consensus Estimate of $1.68 million. The top line fell 4.8% year over year, hurt by the divestiture of Protective Solutions and the thermoformed food packaging plant closure.
Sonoco Products Company Price, Consensus and EPS Surprise
The cost of sales was $1.27 billion, 6.1% lower than the year-earlier quarter. The gross profit in the reported quarter totaled $357 million, flat year over year. The gross margin came in at 22% compared with the year-ago quarter’s 21%.
Selling, general and administrative expenses amounted to $202 million, up 18.5% year over year.
Adjusted operating income was $193 million in the reported quarter compared with the prior-year quarter’s $211 million. The operating margin came in at 11.9%, down from the year-ago quarter’s 12.4%.
Segmental Performance
The Consumer Packaging segment’s net sales were down 4% year over year to $928 million due to lower pricing. This was partially offset by year-over-year volume growth in both food and aerosol. Operating profit amounted to $112 million, up 11% from the prior-year quarter.
Net sales in the Industrial Paper Packaging segment were $601 million, reflecting a year-over-year rise of 3% due to higher volume. Operating profit totaled $67 million, reflecting a 23% year-over-year fall. The gains were partially offset by lower index-related pricing.
Sales for the All Other segment, which comprises protective, healthcare, retail and industrial plastics units, were $95 million, down 36% year over year. Operating profit for the segment totaled $14 million compared with the year-ago quarter’s $23 million.
Financial Performance
Sonoco reported cash and cash equivalents of $140 million at the end of the second quarter of 2024 compared with $152 million at the end of 2023. The company generated cash flow from operating activities of around $275 million in the first half of 2024 compared with $349 million in the prior-year period.
As of Jul 2, 2024, total debt was $3 billion, unchanged from Dec 31, 2023.
Q3 & 2024 Guidance
Sonoco projects the third-quarter 2023 adjusted EPS between $1.40 and $1.60.
The company expects an adjusted EPS of $5.00-$5.30 for 2024. 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.
Price Performance
SON shares have lost 7.4% in the past year against the industry’s growth of 13%.
Image Source: Zacks Investment Research
Zacks Rank
Sonoco currently carries a Zacks Rank #5 (Strong Sell).
Packaging Corporation of America (PKG - Free Report) reported an adjusted EPS of $2.20 in the second quarter of 2024, beating the Zacks Consensus Estimate of $2.12. The reported figure was higher than the company’s guidance of $2.07 in the quarter under review. However, the bottom line decreased 5% year over year.
Sales in the second quarter grew 6.3% year over year to $2.08 billion. The top line beat the Zacks Consensus Estimate of $2.03 billion.
AptarGroup, Inc. (ATR - Free Report) reported second-quarter 2024 adjusted earnings per share of $1.37, beating the Zacks Consensus Estimate of $1.36. The bottom line increased 12% year over year from $1.22 (including comparable exchange rates).
Total revenues increased 1.6% year over year to $910 million in the reported quarter. The reported figure missed the Zacks Consensus Estimate of $923 million. Core sales, excluding currency and acquisition effects, improved 3% year over year. The upside was driven by the solid performance in the Pharma segment. We expected core sales to be up 2.6% in the quarter.
Greif, Inc. (GEF - Free Report) reported adjusted earnings per share of 82 cents in second-quarter fiscal 2024 (ended Apr 30, 2024), which surpassed the Zacks Consensus Estimate of 77 cents. The bottom line fell 54% year over year. Results were impacted by elevated raw material, transportation and manufacturing costs, and higher SG&A expenses, reflecting increased compensation expenses and costs incurred for strategic investments.
Sales rose 4.1% year over year to $1.37 billion. The top line surpassed the Zacks Consensus Estimate of $1.31 billion.
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Sonoco (SON) Earnings Top Estimates in Q2, Sales Dip Y/Y
Sonoco Products Company (SON - Free Report) reported adjusted earnings per share (EPS) of $1.28 in second-quarter 2024, beating the Zacks Consensus Estimate of $1.26. The figure was within the company’s guidance of $1.25-$1.35. The bottom line fell 7% from the prior-year quarter.
Including one-time items, the company reported an EPS of 92 cents compared with the year-ago quarter’s $1.16.
Sonoco’s net sales were $1.62 billion, which missed the Zacks Consensus Estimate of $1.68 million. The top line fell 4.8% year over year, hurt by the divestiture of Protective Solutions and the thermoformed food packaging plant closure.
Sonoco Products Company Price, Consensus and EPS Surprise
Sonoco Products Company price-consensus-eps-surprise-chart | Sonoco Products Company Quote
Operational Update
The cost of sales was $1.27 billion, 6.1% lower than the year-earlier quarter. The gross profit in the reported quarter totaled $357 million, flat year over year. The gross margin came in at 22% compared with the year-ago quarter’s 21%.
Selling, general and administrative expenses amounted to $202 million, up 18.5% year over year.
Adjusted operating income was $193 million in the reported quarter compared with the prior-year quarter’s $211 million. The operating margin came in at 11.9%, down from the year-ago quarter’s 12.4%.
Segmental Performance
The Consumer Packaging segment’s net sales were down 4% year over year to $928 million due to lower pricing. This was partially offset by year-over-year volume growth in both food and aerosol. Operating profit amounted to $112 million, up 11% from the prior-year quarter.
Net sales in the Industrial Paper Packaging segment were $601 million, reflecting a year-over-year rise of 3% due to higher volume. Operating profit totaled $67 million, reflecting a 23% year-over-year fall. The gains were partially offset by lower index-related pricing.
Sales for the All Other segment, which comprises protective, healthcare, retail and industrial plastics units, were $95 million, down 36% year over year. Operating profit for the segment totaled $14 million compared with the year-ago quarter’s $23 million.
Financial Performance
Sonoco reported cash and cash equivalents of $140 million at the end of the second quarter of 2024 compared with $152 million at the end of 2023. The company generated cash flow from operating activities of around $275 million in the first half of 2024 compared with $349 million in the prior-year period.
As of Jul 2, 2024, total debt was $3 billion, unchanged from Dec 31, 2023.
Q3 & 2024 Guidance
Sonoco projects the third-quarter 2023 adjusted EPS between $1.40 and $1.60.
The company expects an adjusted EPS of $5.00-$5.30 for 2024. 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.
Price Performance
SON shares have lost 7.4% in the past year against the industry’s growth of 13%.
Image Source: Zacks Investment Research
Zacks Rank
Sonoco currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Performances
Packaging Corporation of America (PKG - Free Report) reported an adjusted EPS of $2.20 in the second quarter of 2024, beating the Zacks Consensus Estimate of $2.12. The reported figure was higher than the company’s guidance of $2.07 in the quarter under review. However, the bottom line decreased 5% year over year.
Sales in the second quarter grew 6.3% year over year to $2.08 billion. The top line beat the Zacks Consensus Estimate of $2.03 billion.
AptarGroup, Inc. (ATR - Free Report) reported second-quarter 2024 adjusted earnings per share of $1.37, beating the Zacks Consensus Estimate of $1.36. The bottom line increased 12% year over year from $1.22 (including comparable exchange rates).
Total revenues increased 1.6% year over year to $910 million in the reported quarter. The reported figure missed the Zacks Consensus Estimate of $923 million. Core sales, excluding currency and acquisition effects, improved 3% year over year. The upside was driven by the solid performance in the Pharma segment. We expected core sales to be up 2.6% in the quarter.
Greif, Inc. (GEF - Free Report) reported adjusted earnings per share of 82 cents in second-quarter fiscal 2024 (ended Apr 30, 2024), which surpassed the Zacks Consensus Estimate of 77 cents. The bottom line fell 54% year over year. Results were impacted by elevated raw material, transportation and manufacturing costs, and higher SG&A expenses, reflecting increased compensation expenses and costs incurred for strategic investments.
Sales rose 4.1% year over year to $1.37 billion. The top line surpassed the Zacks Consensus Estimate of $1.31 billion.