We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sonoco (SON) Earnings & Sales Beat Estimates in Q4, Up Y/Y
Read MoreHide Full Article
Sonoco Products Company (SON - Free Report) reported adjusted earnings per share (EPS) of 90 cents in fourth-quarter 2021, beating the Zacks Consensus Estimate of 89 cents. The figure met the upper end of the company’s guidance of 84-90 cents. The bottom line increased 9.8% from the prior-year quarter’s levels, aided by benefits from positive price/cost, lower tax rate and strong productivity, which were slightly offset by year-over-year fewer shipping days and the impact from the divestiture of the company’s former display and packaging businesses.
Including one-time items, the company reported EPS of 66 cents against the year-ago quarter’s loss per share of 12 cents.
Sonoco’s net sales were $1.44 billion, beating the Zacks Consensus Estimate of $1.38 billion. The top line rose 4.6% on a year-over-year basis, driven by higher selling prices to combat inflation. The disposition of the company's European and U.S. display and packaging contract businesses in November 2020 and April 2021 had a negative impact.
Operational Update
Cost of sales was $1,176 million, 6.8% higher than the year-earlier quarter’s $1,101 million. Gross profit during the reported quarter totaled $264 million compared with the prior-year quarter’s $275 million. Gross margin came in at 18.3% compared with the year-ago quarter’s 19.9%.
Selling, general and administrative expenses amounted to $154 million, down 2.2% year over year. The adjusted operating income came in at $125 million during the reported quarter compared with the prior-year quarter’s $126 million. The operating margin came in at 8.7%, down from the year-ago quarter’s 9.2%.
Sonoco Products Company Price, Consensus and EPS Surprise
The Consumer Packaging segment’s net sales were up 3.3% year over year to $589 million, driven by higher selling prices, partly offset by fewer shipping days in the quarter. The operating profit amounted to $56 million, down 14.3% from the prior-year quarter’s levels as strong productivity gains were offset by a negative price/cost relationship stemming from raw material cost inflation coupled with the impact of fewer shipping days.
Net sales in the Industrial Paper Packaging segment totaled $655 million, reflecting year-over-year growth of 20.5% on higher selling prices, partly offset by fewer shipping days in the quarter. The operating profit totaled $57 million, reflecting a 33% year-over-year improvement on a positive price/cost relationship, partly offset by the impact of fewer shipping days.
Sales for the All Other segment, which comprises protective, healthcare, retail and industrial plastics units, dropped 25.7% year over year to $195 million. The downside was primarily caused by the disposition of the display and packaging businesses and fewer shipping days. The operating profit for the segment came in at $11.2 million compared with the year-ago quarter’s $17.2 million.
Financial Performance
Sonoco reported cash and cash equivalents of $171 million at the end of 2021 compared with $565 million at 2020-end. The company generated cash flow from operating activities of around $299 million in 2021 compared with $706 million in 2020. Free cash flow was $56 million in 2021 compared with $524 million in 2020.
As of Dec 31, 2021, the total debt was $1.61 billion compared with $1.70 billion as of Dec 31, 2020. At the end of 2021, Sonoco’s total debt to total capital was 46.5% compared with 47.1% at the end of 2020.
2021 Performance
Sonoco reported an adjusted EPS of $3.55 in 2021 compared with $3.41 reported in the prior year. Earnings were in line with the Zacks Consensus Estimate. Including one-time items, the company incurred a loss of 86 cents per share against earnings of $2.05 in 2020.
Sales were up 6.7% year over year to $5.59 billion. The top line surpassed the Zacks Consensus Estimate of $5.53 billion.
Guidance
Sonoco projects first-quarter 2022 adjusted EPS between $1.25 and $1.35.
For 2022, the company expects an adjusted EPS of $4.60-$4.80. Operating cash flow for the year is expected in the range of $690-$740 million and free cash flow is expected between $365 million and $415 million. This includes a positive impact from the Ball Metalpack acquisition.
Price Performance
Sonoco’s shares have lost 4.5% in the past year compared with the industry’s growth of 10%.
Dover’s fourth-quarter 2021 adjusted EPS increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.
Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4%. DOV’s shares have rallied around 44.5% in a year.
Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.
Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 19.7%.
Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.
Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 36% in a year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Sonoco (SON) Earnings & Sales Beat Estimates in Q4, Up Y/Y
Sonoco Products Company (SON - Free Report) reported adjusted earnings per share (EPS) of 90 cents in fourth-quarter 2021, beating the Zacks Consensus Estimate of 89 cents. The figure met the upper end of the company’s guidance of 84-90 cents. The bottom line increased 9.8% from the prior-year quarter’s levels, aided by benefits from positive price/cost, lower tax rate and strong productivity, which were slightly offset by year-over-year fewer shipping days and the impact from the divestiture of the company’s former display and packaging businesses.
Including one-time items, the company reported EPS of 66 cents against the year-ago quarter’s loss per share of 12 cents.
Sonoco’s net sales were $1.44 billion, beating the Zacks Consensus Estimate of $1.38 billion. The top line rose 4.6% on a year-over-year basis, driven by higher selling prices to combat inflation. The disposition of the company's European and U.S. display and packaging contract businesses in November 2020 and April 2021 had a negative impact.
Operational Update
Cost of sales was $1,176 million, 6.8% higher than the year-earlier quarter’s $1,101 million. Gross profit during the reported quarter totaled $264 million compared with the prior-year quarter’s $275 million. Gross margin came in at 18.3% compared with the year-ago quarter’s 19.9%.
Selling, general and administrative expenses amounted to $154 million, down 2.2% year over year. The adjusted operating income came in at $125 million during the reported quarter compared with the prior-year quarter’s $126 million. The operating margin came in at 8.7%, down from the year-ago quarter’s 9.2%.
Sonoco Products Company Price, Consensus and EPS Surprise
Sonoco Products Company price-consensus-eps-surprise-chart | Sonoco Products Company Quote
Segment Performance
The Consumer Packaging segment’s net sales were up 3.3% year over year to $589 million, driven by higher selling prices, partly offset by fewer shipping days in the quarter. The operating profit amounted to $56 million, down 14.3% from the prior-year quarter’s levels as strong productivity gains were offset by a negative price/cost relationship stemming from raw material cost inflation coupled with the impact of fewer shipping days.
Net sales in the Industrial Paper Packaging segment totaled $655 million, reflecting year-over-year growth of 20.5% on higher selling prices, partly offset by fewer shipping days in the quarter. The operating profit totaled $57 million, reflecting a 33% year-over-year improvement on a positive price/cost relationship, partly offset by the impact of fewer shipping days.
Sales for the All Other segment, which comprises protective, healthcare, retail and industrial plastics units, dropped 25.7% year over year to $195 million. The downside was primarily caused by the disposition of the display and packaging businesses and fewer shipping days. The operating profit for the segment came in at $11.2 million compared with the year-ago quarter’s $17.2 million.
Financial Performance
Sonoco reported cash and cash equivalents of $171 million at the end of 2021 compared with $565 million at 2020-end. The company generated cash flow from operating activities of around $299 million in 2021 compared with $706 million in 2020. Free cash flow was $56 million in 2021 compared with $524 million in 2020.
As of Dec 31, 2021, the total debt was $1.61 billion compared with $1.70 billion as of Dec 31, 2020. At the end of 2021, Sonoco’s total debt to total capital was 46.5% compared with 47.1% at the end of 2020.
2021 Performance
Sonoco reported an adjusted EPS of $3.55 in 2021 compared with $3.41 reported in the prior year. Earnings were in line with the Zacks Consensus Estimate. Including one-time items, the company incurred a loss of 86 cents per share against earnings of $2.05 in 2020.
Sales were up 6.7% year over year to $5.59 billion. The top line surpassed the Zacks Consensus Estimate of $5.53 billion.
Guidance
Sonoco projects first-quarter 2022 adjusted EPS between $1.25 and $1.35.
For 2022, the company expects an adjusted EPS of $4.60-$4.80. Operating cash flow for the year is expected in the range of $690-$740 million and free cash flow is expected between $365 million and $415 million. This includes a positive impact from the Ball Metalpack acquisition.
Price Performance
Sonoco’s shares have lost 4.5% in the past year compared with the industry’s growth of 10%.
Zacks Rank and Stocks to Consider
Sonoco currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector include Dover Corporation (DOV - Free Report) , Silgan Holdings Inc. (SLGN - Free Report) and Applied Industrial Technologies, Inc. (AIT - Free Report) , each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dover’s fourth-quarter 2021 adjusted EPS increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.
Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4%. DOV’s shares have rallied around 44.5% in a year.
Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.
Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 19.7%.
Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.
Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 36% in a year.