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Why Is Greif (GEF) Down 4.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Greif (GEF - Free Report) . Shares have lost about 4.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Greif 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 catalysts.
Greif Q4 Earnings Beat Estimates, Revenues Down Y/Y
Greif reported adjusted earnings per share (EPS) of $1.56 for the fourth quarter of fiscal 2023, beating the Zacks Consensus Estimate of $1.30. However, the bottom line decreased 15% year over year.
Including one-time items, EPS was $1.16 in the quarter compared with $1.67 in the prior-year quarter.
Operational Update
Sales were down 12.5% year over year to $1,308 million. The top line missed the Zacks Consensus Estimate of $1,311 million.
The cost of sales was down 12.9% year over year to $1,033 million. The gross profit amounted to $276 million, down 11.1% from the prior-year quarter’s levels. The gross margin came in at 21.1%, up from last year’s 20.7%.
SG&A expenses came in at $137 million compared with the prior-year quarter’s $140 million. Adjusted EBITDA decreased 8.9% year over year to $199 million in the fiscal fourth quarter.
Segmental Performance
Sales in the Global Industrial Packaging segment were $721 million, lower than the prior-year quarter’s $825 million, due to lower volumes and average selling prices. Our model had projected revenues of $735 million for the quarter. The segment’s adjusted EBITDA amounted to $104 million compared with the year-ago quarter’s $96 million. The reported figure missed our estimate of $105 million.
The Paper Packaging segment’s sales fell 12.6% year over year to $582 million in the fiscal fourth quarter due to a decline in volumes and lower selling prices. The figure surpassed our estimated sales of $572 million. The segment’s adjusted EBITDA moved down to $92.5 million from the prior-year quarter’s $121 million. We projected the segment’s adjusted EBITDA to be $87 million.
The Land Management segment’s sales totaled $5.8 million in the reported quarter compared with $5.3 million in the year-ago quarter. We projected the segment's sales to be $5.1 million in the quarter. Adjusted EBITDA was $2.5 million compared with the year-earlier quarter’s $2 million. Our projection for the quarter’s adjusted EBITDA was $2 million.
Financial Position
Greif reported cash and cash equivalents of $181 million at the end of fiscal 2023 compared with $147 million at the end of fiscal 2022. Cash flow from operating activities totaled $650 million in fiscal 2023 compared with $658 million in the prior fiscal.
Long-term debt amounted to $2.12 billion as of Oct 31, 2023 compared with $1.8 billion as of Oct 31, 2022.
On Dec 5, Greif’s board announced a quarterly cash dividend of 52 cents per share of Class A Common Stock and 77 cents per share of Class B Common Stock. The dividend will be paid out on Jan 1, 2024, to shareholders of record at the close of the business as of Dec 18, 2022. In fiscal 2023, GEF paid stockholders a record $116.5 million in cash dividends.
Fiscal 2023 Performance
Adjusted EPS for fiscal 2023 came in at $6.14, missing the Zacks Consensus Estimate of $8.03. The bottom line fell 22% from fiscal 2022. Including one-time items, EPS was $6.15 in fiscal 2023 compared with $6.30 in the prior fiscal.
Total revenues for fiscal year 2023 came in at $5.2 billion compared with $6.3 billion reported in fiscal 2022. The top line came in line with the Zacks Consensus Estimate.
Outlook
Greif expects the low end of fiscal 2024 adjusted free cash flow to be $200 million. The low end of adjusted EBITDA is anticipated to be $585 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -83.6% due to these changes.
VGM Scores
Currently, Greif has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile 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 this revision indicates a downward shift. It's no surprise Greif has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Greif (GEF) Down 4.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Greif (GEF - Free Report) . Shares have lost about 4.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Greif 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 catalysts.
Greif Q4 Earnings Beat Estimates, Revenues Down Y/Y
Greif reported adjusted earnings per share (EPS) of $1.56 for the fourth quarter of fiscal 2023, beating the Zacks Consensus Estimate of $1.30. However, the bottom line decreased 15% year over year.
Including one-time items, EPS was $1.16 in the quarter compared with $1.67 in the prior-year quarter.
Operational Update
Sales were down 12.5% year over year to $1,308 million. The top line missed the Zacks Consensus Estimate of $1,311 million.
The cost of sales was down 12.9% year over year to $1,033 million. The gross profit amounted to $276 million, down 11.1% from the prior-year quarter’s levels. The gross margin came in at 21.1%, up from last year’s 20.7%.
SG&A expenses came in at $137 million compared with the prior-year quarter’s $140 million. Adjusted EBITDA decreased 8.9% year over year to $199 million in the fiscal fourth quarter.
Segmental Performance
Sales in the Global Industrial Packaging segment were $721 million, lower than the prior-year quarter’s $825 million, due to lower volumes and average selling prices. Our model had projected revenues of $735 million for the quarter. The segment’s adjusted EBITDA amounted to $104 million compared with the year-ago quarter’s $96 million. The reported figure missed our estimate of $105 million.
The Paper Packaging segment’s sales fell 12.6% year over year to $582 million in the fiscal fourth quarter due to a decline in volumes and lower selling prices. The figure surpassed our estimated sales of $572 million. The segment’s adjusted EBITDA moved down to $92.5 million from the prior-year quarter’s $121 million. We projected the segment’s adjusted EBITDA to be $87 million.
The Land Management segment’s sales totaled $5.8 million in the reported quarter compared with $5.3 million in the year-ago quarter. We projected the segment's sales to be $5.1 million in the quarter. Adjusted EBITDA was $2.5 million compared with the year-earlier quarter’s $2 million. Our projection for the quarter’s adjusted EBITDA was $2 million.
Financial Position
Greif reported cash and cash equivalents of $181 million at the end of fiscal 2023 compared with $147 million at the end of fiscal 2022. Cash flow from operating activities totaled $650 million in fiscal 2023 compared with $658 million in the prior fiscal.
Long-term debt amounted to $2.12 billion as of Oct 31, 2023 compared with $1.8 billion as of Oct 31, 2022.
On Dec 5, Greif’s board announced a quarterly cash dividend of 52 cents per share of Class A Common Stock and 77 cents per share of Class B Common Stock. The dividend will be paid out on Jan 1, 2024, to shareholders of record at the close of the business as of Dec 18, 2022. In fiscal 2023, GEF paid stockholders a record $116.5 million in cash dividends.
Fiscal 2023 Performance
Adjusted EPS for fiscal 2023 came in at $6.14, missing the Zacks Consensus Estimate of $8.03. The bottom line fell 22% from fiscal 2022. Including one-time items, EPS was $6.15 in fiscal 2023 compared with $6.30 in the prior fiscal.
Total revenues for fiscal year 2023 came in at $5.2 billion compared with $6.3 billion reported in fiscal 2022. The top line came in line with the Zacks Consensus Estimate.
Outlook
Greif expects the low end of fiscal 2024 adjusted free cash flow to be $200 million. The low end of adjusted EBITDA is anticipated to be $585 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -83.6% due to these changes.
VGM Scores
Currently, Greif has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile 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 this revision indicates a downward shift. It's no surprise Greif has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.