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Will Lower Volumes Impact Amcor's (AMCR) Q4 Performance?

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Amcor Plc (AMCR - Free Report) is scheduled to report fourth-quarter fiscal 2024 results on Aug 15, after the closing bell.

The Zacks Consensus Estimate for AMCR’s fiscal fourth-quarter revenues is pegged at $3.66 billion, indicating a 0.3% decline from the year-ago reported figure.

The consensus estimate for earnings is pegged at 21 cents per share. The Zacks Consensus Estimate for AMCR’s fiscal fourth-quarter earnings has moved up 5% in the past 60 days. The estimate indicates year-over-year growth of 10.5%.

 

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Image Source: Zacks Investment Research

 

Solid Earnings Surprise History

Amcor’s earnings beat the Zacks Consensus Estimates in the trailing four quarters, the average surprise being 8.1%.

 

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Image Source: Zacks Investment Research

 

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Amcor this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Amcor is 0.00%.

Zacks Rank: AMCR currently carries a Zacks Rank of 2.

Factors Likely to Have Shaped Q4 Performance

Amcor’s total volume growth has been in the negative territory since the first quarter of fiscal 2023, reflecting weak market demand. This is likely to have been led by inflationary pressures that have been weighing on consumer spending, which, in turn, have affected packaging demand. Customers have been trying to lower their elevated inventories, which have also weighed on volumes.

Our model projects a 1.3% decline in overall volumes for the fourth quarter of fiscal 2024, factoring in inventory destocking at customers’ end, as well as low demand. It is expected to have been offset by the price/mix benefits of 9.7% for the quarter.

In addition to weak demand, Amcor has been facing intermittent supply shortages, and price volatility of certain resins and raw materials because of market dynamics and higher rates of inflation impacting other costs. This is expected to get reflected in the company’s fiscal fourth-quarter earnings results.

Segment Projections

The Flexibles segment reported volume declines in the last seven quarters, impacted by overall weak demand and customer destocking. Considering there has been no major improvement in the quarter under review, our model projects a 1.1% decline in the segment’s overall volumes in the to-be-reported quarter. The price/mix is expected to be a favorable 9.8%. Our sales projection for the Flexibles segment is pegged at $2.83 billion, indicating 1.8% year-over-year growth.

The Rigid Packaging segment has also been impacted by the unfavorable conditions mentioned above. Volumes have been down in the past six quarters. Our model projects a 2% drop in volumes for the segment in the fiscal fourth quarter and a price/mix increase of 9.3%. The sales projection for the segment is $905 million, indicating 0.8% year-over-year growth.

Brand extensions, and the introduction of health and wellness-oriented products in PET containers have been supporting growth.

Price Performance

Over the past year, shares of Amcor have gained 14.7% compared with the industry’s 13.3% growth.

 

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Stocks to Consider

Here are some stocks with the right combination of elements to post an earnings beat in their upcoming releases.

Abercrombie & Fitch (ANF - Free Report) , scheduled to release second-quarter 2024 earnings on Aug 28, currently has an Earnings ESP of +5.40% and a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ANF’s earnings is pegged at $2.13 per share, indicating a significant jump of 93.64% from the prior-year quarter’s reported figure. It has a trailing four-quarter average earnings surprise of 210%.

Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) , expected to release earnings soon, currently has an Earnings ESP of +2.38% and a Zacks Rank of 3. 

The consensus estimate for OLLI’s earnings for the second quarter of 2024 is pegged at 78 cents per share, indicating year-over-year growth of 16.4%. OLLI has a trailing four-quarter average surprise of 10.4%.

Costco Wholesale Corporation (COST - Free Report) , scheduled to release fourth-quarter fiscal 2024 earnings on Sep 26, currently has an Earnings ESP of +0.67% and a Zacks Rank of 3.

The Zacks Consensus Estimate for COST’s earnings for the fourth quarter is pegged at $5.02, suggesting a year-over-year increase of 3.3%. It has a trailing four-quarter average earnings surprise of 2.3%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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