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.
Sealed Air (SEE) Up 2.12% Since Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Sealed Air Corporation (SEE - Free Report) . Shares have added about 2.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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 drivers.
Sealed Air Misses on Q1 Earnings, Updates 2017 View
Sealed Air reported first-quarter 2017 adjusted earnings per share of $0.43, up 2.4% year over year. Earnings, however, missed the Zacks Consensus Estimate of $0.46.
Including special items, the company posted a loss of $0.27 per share, as against earnings of $0.37 recorded in the year-ago quarter.
Total revenue increased 2.6% year over year on a reported basis to $1.03 billion in the quarter. However, revenues missed the Zacks Consensus Estimate of $1.60 billion. Currency had a negative impact on total net sales of 0.1% or $1 million. As reported, net sales in Latin America and North America increased 7.2% and 5.9%, respectively. Sales in the Asia Pacific were up 3.1% as reported, while EMEA sales declined 6.7%.
Cost and Margins
Cost of sales went up 3.8% year over year to $695.8 million. Gross profit inched up 0.2% to $336.4 million. Gross margin contracted 80 basis points (bps) to 32.6% in the quarter.
SG&A expenses increased 5.8% to $195.8 million from the prior-year period. Adjusted operating profit decreased 6.6% to $140.6 million. Adjusted operating margin contracted 140 bps to 13.6%. Adjusted earnings before interest, taxes and depreciation, and amortization (EBITDA) were $181.9 million compared with $186.2 million in the year-ago quarter.
Segment Performance
As a result of the Diversey sell transaction, Sealed Air changed its segment reporting structure effective as of Jan 1, 2017. Food Care now includes the Medical Applications businesses which were previously reported under 'Other'. Additionally, Food Care now excludes the food hygiene business, which is a component of Diversey and classified as discontinued operations.
Food Care: Net sales climbed 2.7% year over year to $656 million. Currency had a positive impact of 0.6% or $4 million. On a constant dollar basis, net sales increased 2.1% due to positive volume growth of 3.1% partially offset by lower price/mix of 1%. However, adjusted EBITDA grew 2.1% to $141.5 million.
Product Care: The segment reported net sales of $377 million, up 2.5% year over year on a reported basis and 3.6% on a constant dollar basis. Currency had a negative impact on Product Care net sales of 1.1% or $4 million. Sales volume increased 5% with positive trends across all regions. This was offset by unfavorable price/mix of 1.4%. Adjusted EBITDA decreased 3.9% to $74 million.
Financial & Other Updates
Cash and cash equivalents were $258.4 million as of Mar 31, 2017, down from $333.7 million as of Dec 31, 2016. Cash flow from operating activities was $17.2 million during the first quarter, up from $14.7 million in the year-earlier quarter.
As of Mar 31, 2017, Sealed Air’s net debt came in at $4.059 billion, nearly flat with $4.060 billion as of Dec 31, 2016. Capital expenditures decreased to $50 million in the first quarter compared to $52 million incurred in the prior-year quarter.
Sealed Air authorized an increase of the share repurchase program by an additional $1.5 billion shares. With this increase, the total authorization for future repurchases under the program is approximately $2.2 billion.
In Mar 2017, Sealed Air entered into a definitive agreement to sell Diversey to Bain Capital Private Equity, a leading global private investment firm, for $3.2 billion. The transaction is expected to close in early September.
Guidance
For full-year 2017, Sealed Air expects sales of $4.3 billion compared to $4.2 billion recorded in 2016. The guidance reflects an expected 3% constant dollar sales growth in Food Care and 3–4% constant dollar sales growth in Product Care. Currency will negatively impact 2017 net sales by $35 million. Adjusted EBITDA is estimated to be approximately $825 million and adjusted EPS is likely to be around $1.70 per share for 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, the stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
The stock has a Zacks Rank #5 (Strong Sell). We are looking for a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Sealed Air (SEE) Up 2.12% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Sealed Air Corporation (SEE - Free Report) . Shares have added about 2.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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 drivers.
Sealed Air Misses on Q1 Earnings, Updates 2017 View
Sealed Air reported first-quarter 2017 adjusted earnings per share of $0.43, up 2.4% year over year. Earnings, however, missed the Zacks Consensus Estimate of $0.46.
Including special items, the company posted a loss of $0.27 per share, as against earnings of $0.37 recorded in the year-ago quarter.
Total revenue increased 2.6% year over year on a reported basis to $1.03 billion in the quarter. However, revenues missed the Zacks Consensus Estimate of $1.60 billion. Currency had a negative impact on total net sales of 0.1% or $1 million. As reported, net sales in Latin America and North America increased 7.2% and 5.9%, respectively. Sales in the Asia Pacific were up 3.1% as reported, while EMEA sales declined 6.7%.
Cost and Margins
Cost of sales went up 3.8% year over year to $695.8 million. Gross profit inched up 0.2% to $336.4 million. Gross margin contracted 80 basis points (bps) to 32.6% in the quarter.
SG&A expenses increased 5.8% to $195.8 million from the prior-year period. Adjusted operating profit decreased 6.6% to $140.6 million. Adjusted operating margin contracted 140 bps to 13.6%. Adjusted earnings before interest, taxes and depreciation, and amortization (EBITDA) were $181.9 million compared with $186.2 million in the year-ago quarter.
Segment Performance
As a result of the Diversey sell transaction, Sealed Air changed its segment reporting structure effective as of Jan 1, 2017. Food Care now includes the Medical Applications businesses which were previously reported under 'Other'. Additionally, Food Care now excludes the food hygiene business, which is a component of Diversey and classified as discontinued operations.
Food Care: Net sales climbed 2.7% year over year to $656 million. Currency had a positive impact of 0.6% or $4 million. On a constant dollar basis, net sales increased 2.1% due to positive volume growth of 3.1% partially offset by lower price/mix of 1%. However, adjusted EBITDA grew 2.1% to $141.5 million.
Product Care: The segment reported net sales of $377 million, up 2.5% year over year on a reported basis and 3.6% on a constant dollar basis. Currency had a negative impact on Product Care net sales of 1.1% or $4 million. Sales volume increased 5% with positive trends across all regions. This was offset by unfavorable price/mix of 1.4%. Adjusted EBITDA decreased 3.9% to $74 million.
Financial & Other Updates
Cash and cash equivalents were $258.4 million as of Mar 31, 2017, down from $333.7 million as of Dec 31, 2016. Cash flow from operating activities was $17.2 million during the first quarter, up from $14.7 million in the year-earlier quarter.
As of Mar 31, 2017, Sealed Air’s net debt came in at $4.059 billion, nearly flat with $4.060 billion as of Dec 31, 2016. Capital expenditures decreased to $50 million in the first quarter compared to $52 million incurred in the prior-year quarter.
Sealed Air authorized an increase of the share repurchase program by an additional $1.5 billion shares. With this increase, the total authorization for future repurchases under the program is approximately $2.2 billion.
In Mar 2017, Sealed Air entered into a definitive agreement to sell Diversey to Bain Capital Private Equity, a leading global private investment firm, for $3.2 billion. The transaction is expected to close in early September.
Guidance
For full-year 2017, Sealed Air expects sales of $4.3 billion compared to $4.2 billion recorded in 2016. The guidance reflects an expected 3% constant dollar sales growth in Food Care and 3–4% constant dollar sales growth in Product Care. Currency will negatively impact 2017 net sales by $35 million. Adjusted EBITDA is estimated to be approximately $825 million and adjusted EPS is likely to be around $1.70 per share for 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Sealed Air Corporation Price and Consensus
Sealed Air Corporation Price and Consensus | Sealed Air Corporation Quote
VGM Scores
At this time, the stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
The stock has a Zacks Rank #5 (Strong Sell). We are looking for a below average return from the stock in the next few months.