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Bemis (BMS) Misses on Q3 Earnings, Tops Revenue Estimates
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Bemis Company, Inc. delivered third-quarter 2018 adjusted earnings per share of 77 cents, which improved 10% year over year. Earnings, however, missed the Zacks Consensus Estimate by a penny.
Including one-time costs, Bemis reported earnings of 63 cents per share, which increased 3% year over year from 61 cents per share witnessed in the prior-year quarter.
Operational Update
Net sales edged down 0.8% to $1,026 million from $1,035 million recorded in the year-ago quarter. The reported figure beat the Zacks Consensus Estimate of $1,021 million.
Bemis Company, Inc. Price, Consensus and EPS Surprise
Cost of products sold declined 0.7% year over year to $821 million in the to-be-reported quarter. Gross profit went down 1.4% year over year to $205 million. Gross margin remained flat year over year at 20%.
Selling, general and administrative expenses dipped 5% to $91 million from the year-earlier quarter. Adjusted operating income increased 3% year over year to $105 million. Adjusted operating margin expanded 30 basis points to 10.2% in the quarter under review.
Segment Performance
Net sales in the U.S. Packaging segment climbed 2.4% year over year to $688 million. However, the segment’s operating profit decreased 6% to $93 million from $100 million in the prior-year quarter.
Net sales in the Latin America Packaging segment declined around 19% year over year to $148 million. However, the segment’s operating profit improved to $8 million from $7.3 million recorded in the year-ago quarter.
Net sales in the Rest of World Packaging segment increased 6% year over year to $190 million. Segment operating profit jumped 28% to $22 million from $17 million in the prior-year quarter.
Financial Update
Bemis reported cash and cash equivalents of $62 million at the end of the third quarter, down from $71 million recorded at the end of 2017. Cash flow from operations came in at $303 million for the nine-month period ended Sep 30, 2018, compared with $300 million recorded in the comparable period last year.
Bemis’ net debt increased to $1.38 billion as of Sep 30, 2018, lower than $1.49 billion as of Dec 31, 2017.
Agility Plan
To fix, strengthen, and grow its business, Bemis launched an improvement plan called “Agility” in 2017. As part of this three-pronged approach, the “fix” aspect involves restructuring and cost-savings plan target of $65 million pre-tax by the end of 2019. Agility-related savings were approximately $9 million during the Sep-end quarter. In 2018, Bemis anticipates to realize around $35 million of benefit.
Bemis & Amcor Merger
In August 2018, Amcor and Bemis announced to merge their operations in a $6.8-billion all-stock transaction. The merger will create a global leader in consumer packaging. Bemis’ shareholders will benefit from the expected increase in dividend, which nearly doubles from its current dividend. The merger will provide $180 million of cost synergies identified as part of the transaction. The company remains on track to close the deal in first-quarter 2019.
Guidance
Management revised its full-year 2018 adjusted diluted earnings per share guidance to $2.77-$2.82 compared with the previous guidance of $2.75-$2.85. For the current year, Bemis maintained its cash from operations guidance of $410-$430 million and capital expenditures outlook of $150-$160 million.
Bemis expects restructuring and other cash costs to be approximately $60 million in 2018. The company will also witness headwinds from currency and freight costs in the rest of the year.
Share Price Performance
Bemis' shares have been outperformed its industry with respect to price performance in the past year. The stock has depreciated 0.6%, while the industry recorded loss of around 15%.
AptarGroup has a long-term earnings growth rate of 8.5%. The stock has gained 16% in a year’s time.
Tetra Tech has a long-term earnings growth rate of 14%. Its shares have rallied 35% in the past year.
DMC Global has a long-term earnings growth rate of 20%. The company’s shares have been up 70% over the past year.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>
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Bemis (BMS) Misses on Q3 Earnings, Tops Revenue Estimates
Bemis Company, Inc. delivered third-quarter 2018 adjusted earnings per share of 77 cents, which improved 10% year over year. Earnings, however, missed the Zacks Consensus Estimate by a penny.
Including one-time costs, Bemis reported earnings of 63 cents per share, which increased 3% year over year from 61 cents per share witnessed in the prior-year quarter.
Operational Update
Net sales edged down 0.8% to $1,026 million from $1,035 million recorded in the year-ago quarter. The reported figure beat the Zacks Consensus Estimate of $1,021 million.
Bemis Company, Inc. Price, Consensus and EPS Surprise
Bemis Company, Inc. Price, Consensus and EPS Surprise | Bemis Company, Inc. Quote
Cost of products sold declined 0.7% year over year to $821 million in the to-be-reported quarter. Gross profit went down 1.4% year over year to $205 million. Gross margin remained flat year over year at 20%.
Selling, general and administrative expenses dipped 5% to $91 million from the year-earlier quarter. Adjusted operating income increased 3% year over year to $105 million. Adjusted operating margin expanded 30 basis points to 10.2% in the quarter under review.
Segment Performance
Net sales in the U.S. Packaging segment climbed 2.4% year over year to $688 million. However, the segment’s operating profit decreased 6% to $93 million from $100 million in the prior-year quarter.
Net sales in the Latin America Packaging segment declined around 19% year over year to $148 million. However, the segment’s operating profit improved to $8 million from $7.3 million recorded in the year-ago quarter.
Net sales in the Rest of World Packaging segment increased 6% year over year to $190 million. Segment operating profit jumped 28% to $22 million from $17 million in the prior-year quarter.
Financial Update
Bemis reported cash and cash equivalents of $62 million at the end of the third quarter, down from $71 million recorded at the end of 2017. Cash flow from operations came in at $303 million for the nine-month period ended Sep 30, 2018, compared with $300 million recorded in the comparable period last year.
Bemis’ net debt increased to $1.38 billion as of Sep 30, 2018, lower than $1.49 billion as of Dec 31, 2017.
Agility Plan
To fix, strengthen, and grow its business, Bemis launched an improvement plan called “Agility” in 2017. As part of this three-pronged approach, the “fix” aspect involves restructuring and cost-savings plan target of $65 million pre-tax by the end of 2019. Agility-related savings were approximately $9 million during the Sep-end quarter. In 2018, Bemis anticipates to realize around $35 million of benefit.
Bemis & Amcor Merger
In August 2018, Amcor and Bemis announced to merge their operations in a $6.8-billion all-stock transaction. The merger will create a global leader in consumer packaging. Bemis’ shareholders will benefit from the expected increase in dividend, which nearly doubles from its current dividend. The merger will provide $180 million of cost synergies identified as part of the transaction. The company remains on track to close the deal in first-quarter 2019.
Guidance
Management revised its full-year 2018 adjusted diluted earnings per share guidance to $2.77-$2.82 compared with the previous guidance of $2.75-$2.85. For the current year, Bemis maintained its cash from operations guidance of $410-$430 million and capital expenditures outlook of $150-$160 million.
Bemis expects restructuring and other cash costs to be approximately $60 million in 2018. The company will also witness headwinds from currency and freight costs in the rest of the year.
Share Price Performance
Bemis' shares have been outperformed its industry with respect to price performance in the past year. The stock has depreciated 0.6%, while the industry recorded loss of around 15%.
Zacks Rank & Key Picks
Currently, Bemis carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the same space include AptarGroup, Inc. (ATR - Free Report) , Tetra Tech, Inc. (TTEK - Free Report) and DMC Global Inc. (BOOM - Free Report) . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
AptarGroup has a long-term earnings growth rate of 8.5%. The stock has gained 16% in a year’s time.
Tetra Tech has a long-term earnings growth rate of 14%. Its shares have rallied 35% in the past year.
DMC Global has a long-term earnings growth rate of 20%. The company’s shares have been up 70% over the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>