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Silgan (SLGN) Down 1.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Silgan Holdings (SLGN - Free Report) . Shares have lost about 1.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Silgan due for a breakout? 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.
Silgan reported adjusted earnings of 88 cents per share in second-quarter 2024, which beat the Zacks Consensus Estimate of adjusted earnings of 87 cents. The bottom line improved 6% year over year and was within the company’s guidance of 82-92 cents.
Including one-time items, earnings were 71 cents per share, flat with the prior-year quarter.
Total revenues decreased 3.2% year over year to $1.38 billion. The top line missed the Zacks Consensus Estimate of $1.43 billion. The downside was driven by contractual pass-through of lower raw material costs.
Costs & Margins
In second-quarter 2024, the cost of goods sold decreased 4.4% year over year to $1.13 billion. The gross profit increased 2.4% to $256 million. The gross margin was 18.5% compared with the prior-year quarter’s 17.5%.
Selling, general and administrative expenses were $108 million in the reported quarter compared with the year-ago quarter’s $102 million. The company reported an operating income of $142 million in the quarter compared with $144 million in the prior-year quarter.
Adjusted operating profit was $165 million in the second quarter of 2024, which was 2.8% higher than $161 million in the prior-year quarter. The adjusted operating margin was 12% in the reported quarter compared with the prior-year quarter’s 11.3%.
Segmental Performances
Revenues in the Dispensing and Specialty Closures segment were up 1% year over year to $565 million in the second quarter. The upside was driven by higher volume and mix, as well as a double-digit improvement in dispensing products. The gains were offset by lower prices and unfavorable foreign currency translation. The adjusted operating income for the segment was $93 million compared with $77 million in second-quarter 2023.
The Metal Containers segment’s revenues declined 8% year over year to $651 million due to lower price and mix, partially offset by higher volume. The segment’s adjusted operating income was $58.5 million, a 22.7% decline from the prior-year quarter’s $76 million.
In the Custom Containers segment, revenues were $165 million compared with the year-ago quarter’s $156 million. The increase was driven by higher volumes. The segment reported an adjusted operating income of $22.5 million, up from the previous-year quarter’s $18.5 million.
Cash Flow & Cash Position
The company had cash and cash equivalents of $303 million at the end of the second quarter of 2024 compared with $643 million at the end of 2023. The company used around $527 million in cash from operating activities in the first six months of 2024 compared with an outflow of $812 million in last year’s comparable period.
2024 Outlook
Silgan expects 2024 adjusted earnings per share (EPS) between $3.55 and $3.75. Volumes in all segments are expected to improve from the 2023 reported levels. The company had recorded an adjusted EPS of $3.40 in 2023.
For third-quarter 2024, SLGN anticipates an adjusted EPS of $1.20-$1.30.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Silgan has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. 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 A. 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. Notably, Silgan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Silgan is part of the Zacks Containers - Metal and Glass industry. Over the past month, Crown Holdings (CCK - Free Report) , a stock from the same industry, has gained 1.2%. The company reported its results for the quarter ended June 2024 more than a month ago.
Crown reported revenues of $3.04 billion in the last reported quarter, representing a year-over-year change of -2.2%. EPS of $1.81 for the same period compares with $1.68 a year ago.
For the current quarter, Crown is expected to post earnings of $1.81 per share, indicating a change of +4.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Crown. Also, the stock has a VGM Score of A.
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Silgan (SLGN) Down 1.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Silgan Holdings (SLGN - Free Report) . Shares have lost about 1.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Silgan due for a breakout? 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.
Silgan Q2 Earnings Beat Estimates, Revenues Dip Y/Y
Silgan reported adjusted earnings of 88 cents per share in second-quarter 2024, which beat the Zacks Consensus Estimate of adjusted earnings of 87 cents. The bottom line improved 6% year over year and was within the company’s guidance of 82-92 cents.
Including one-time items, earnings were 71 cents per share, flat with the prior-year quarter.
Total revenues decreased 3.2% year over year to $1.38 billion. The top line missed the Zacks Consensus Estimate of $1.43 billion. The downside was driven by contractual pass-through of lower raw material costs.
Costs & Margins
In second-quarter 2024, the cost of goods sold decreased 4.4% year over year to $1.13 billion. The gross profit increased 2.4% to $256 million. The gross margin was 18.5% compared with the prior-year quarter’s 17.5%.
Selling, general and administrative expenses were $108 million in the reported quarter compared with the year-ago quarter’s $102 million. The company reported an operating income of $142 million in the quarter compared with $144 million in the prior-year quarter.
Adjusted operating profit was $165 million in the second quarter of 2024, which was 2.8% higher than $161 million in the prior-year quarter. The adjusted operating margin was 12% in the reported quarter compared with the prior-year quarter’s 11.3%.
Segmental Performances
Revenues in the Dispensing and Specialty Closures segment were up 1% year over year to $565 million in the second quarter. The upside was driven by higher volume and mix, as well as a double-digit improvement in dispensing products. The gains were offset by lower prices and unfavorable foreign currency translation. The adjusted operating income for the segment was $93 million compared with $77 million in second-quarter 2023.
The Metal Containers segment’s revenues declined 8% year over year to $651 million due to lower price and mix, partially offset by higher volume. The segment’s adjusted operating income was $58.5 million, a 22.7% decline from the prior-year quarter’s $76 million.
In the Custom Containers segment, revenues were $165 million compared with the year-ago quarter’s $156 million. The increase was driven by higher volumes. The segment reported an adjusted operating income of $22.5 million, up from the previous-year quarter’s $18.5 million.
Cash Flow & Cash Position
The company had cash and cash equivalents of $303 million at the end of the second quarter of 2024 compared with $643 million at the end of 2023. The company used around $527 million in cash from operating activities in the first six months of 2024 compared with an outflow of $812 million in last year’s comparable period.
2024 Outlook
Silgan expects 2024 adjusted earnings per share (EPS) between $3.55 and $3.75. Volumes in all segments are expected to improve from the 2023 reported levels. The company had recorded an adjusted EPS of $3.40 in 2023.
For third-quarter 2024, SLGN anticipates an adjusted EPS of $1.20-$1.30.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Silgan has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. 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 A. 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. Notably, Silgan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Silgan is part of the Zacks Containers - Metal and Glass industry. Over the past month, Crown Holdings (CCK - Free Report) , a stock from the same industry, has gained 1.2%. The company reported its results for the quarter ended June 2024 more than a month ago.
Crown reported revenues of $3.04 billion in the last reported quarter, representing a year-over-year change of -2.2%. EPS of $1.81 for the same period compares with $1.68 a year ago.
For the current quarter, Crown is expected to post earnings of $1.81 per share, indicating a change of +4.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Crown. Also, the stock has a VGM Score of A.