Berry Global Group, Inc. (BERY - Free Report) reported first-quarter fiscal 2023 (ended Dec 31, 2022) adjusted earnings (excluding 45 cents from non-recurring items) of $1.30 per share, which surpassed the Zacks Consensus Estimate of $1.27. The bottom line increased 4% year over year due to lower costs.
Net sales of $3,060 million missed the Zacks Consensus Estimate of $3,303.2 million. The top line decreased 14.4% year over year due to a 6% decline in volumes, a 4% decrease in selling prices and a 3% impact from foreign currency headwind.
In the fiscal first quarter, Berry Global’s cost of goods sold decreased 16.3% to $2,542 million. Selling, general and administrative expenses were nearly flat year over year at $236 million. Berry Global reported an operating EBITDA of $443 million, down 3% year over year. Adjusted operating income in the quarter dipped 0.8% year over year to $244 million.
Segmental Discussion
Consumer Packaging – International sales were $936 million, down 11.4% from the year-ago quarter’s level. The decline is primarily due to $65 million impact from unfavorable foreign currency movement and a 5% decrease in volumes. Operating income of $47 million fell 31.9% year over year. The segment accounted for 30.6% of the quarter’s net sales.
Consumer Packaging – North America’s sales were $764 million, down 10.3% year over year due to a 3% decline in volumes and $62 million impact from a decrease in selling prices. Operating income jumped 54.3% year over year to $71 million. The segment accounted for 25% of total net sales.
Revenues generated from Health, Hygiene & Specialties amounted to $663 million, down 18.9% year over year due to a decrease in selling prices, unfavorable foreign currency impact and volume declines. Operating income of $34 million declined 45.2% year over year. The segment accounted for 21.7% of total net sales in the reported quarter.
Revenues from Engineered Materials fell 17.7% year over year to $697 million due to a decrease in selling prices, a 9% decline in volumes and unfavorable foreign currency movements. Operating income of $58 million climbed 11.5% year over year. The segment accounted for 22.8% of the quarter’s net sales.
Balance Sheet and Cash Flow
At the end of first-quarter fiscal 2023, Berry Global had cash and cash equivalents of $717 million compared with $1,410 million at the end of fiscal 2022. Current and long-term debt totaled $9,272 million compared with $9,255 million at the end of fiscal 2022.
At the end of first-quarter fiscal 2023, Berry Global used net cash of $233 million in operating activities compared with $304 million used in the year-ago period. Capital expenditure totaled $211 million compared with $162 million in the year-ago quarter. Adjusted free cash flow at the end of the fiscal first quarter was negative $444 million compared with negative $466 million in the year-ago period.
In first-quarter fiscal 2023, BERY returned $211 million to shareholders through $178 million in share repurchases and $33 million in dividends. The company expects to repurchase shares worth at least $600 million in fiscal 2023.
Fiscal 2023 Outlook
Berry Global expects adjusted earnings of $7.30-$7.80 per share in fiscal 2023. The mid-point of the guided range — $7.55 — lies above the Zacks Consensus Estimate of $7.51.
BERY anticipates cash flow from operations of $1.4-$1.5 billion, while free cash flow is expected to be $800-$900 million in fiscal 2023. The company expects to reward shareholders with at least $700 million through dividends and share buybacks in fiscal 2023.
Zacks Rank & Key Picks
Berry Global currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the broader Industrial Products sector are as follows:
Allegion plc (ALLE - Free Report) presently sports a Zacks Rank #1 (Strong Buy). ALLE pulled off a trailing four-quarter earnings surprise of 8.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
The Zacks Consensus Estimate for Allegion’s fourth-quarter earnings has been revised downward by 2.8% in the past 60 days. The stock has gained 17.6% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank of 2 (Buy). VMI delivered a trailing four-quarter earnings surprise of 12.5%, on average.
The Zacks Consensus Estimate for Valmont’s fourth-quarter earnings estimate has been revised upward by a penny in the past 60 days. The stock has rallied 19.4% in the past six months.
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Berry Global Group, Inc. (BERY - Free Report) reported first-quarter fiscal 2023 (ended Dec 31, 2022) adjusted earnings (excluding 45 cents from non-recurring items) of $1.30 per share, which surpassed the Zacks Consensus Estimate of $1.27. The bottom line increased 4% year over year due to lower costs.
Net sales of $3,060 million missed the Zacks Consensus Estimate of $3,303.2 million. The top line decreased 14.4% year over year due to a 6% decline in volumes, a 4% decrease in selling prices and a 3% impact from foreign currency headwind.
In the fiscal first quarter, Berry Global’s cost of goods sold decreased 16.3% to $2,542 million. Selling, general and administrative expenses were nearly flat year over year at $236 million. Berry Global reported an operating EBITDA of $443 million, down 3% year over year. Adjusted operating income in the quarter dipped 0.8% year over year to $244 million.
Segmental Discussion
Consumer Packaging – International sales were $936 million, down 11.4% from the year-ago quarter’s level. The decline is primarily due to $65 million impact from unfavorable foreign currency movement and a 5% decrease in volumes. Operating income of $47 million fell 31.9% year over year. The segment accounted for 30.6% of the quarter’s net sales.
Consumer Packaging – North America’s sales were $764 million, down 10.3% year over year due to a 3% decline in volumes and $62 million impact from a decrease in selling prices. Operating income jumped 54.3% year over year to $71 million. The segment accounted for 25% of total net sales.
Revenues generated from Health, Hygiene & Specialties amounted to $663 million, down 18.9% year over year due to a decrease in selling prices, unfavorable foreign currency impact and volume declines. Operating income of $34 million declined 45.2% year over year. The segment accounted for 21.7% of total net sales in the reported quarter.
Revenues from Engineered Materials fell 17.7% year over year to $697 million due to a decrease in selling prices, a 9% decline in volumes and unfavorable foreign currency movements. Operating income of $58 million climbed 11.5% year over year. The segment accounted for 22.8% of the quarter’s net sales.
Balance Sheet and Cash Flow
At the end of first-quarter fiscal 2023, Berry Global had cash and cash equivalents of $717 million compared with $1,410 million at the end of fiscal 2022. Current and long-term debt totaled $9,272 million compared with $9,255 million at the end of fiscal 2022.
At the end of first-quarter fiscal 2023, Berry Global used net cash of $233 million in operating activities compared with $304 million used in the year-ago period. Capital expenditure totaled $211 million compared with $162 million in the year-ago quarter. Adjusted free cash flow at the end of the fiscal first quarter was negative $444 million compared with negative $466 million in the year-ago period.
In first-quarter fiscal 2023, BERY returned $211 million to shareholders through $178 million in share repurchases and $33 million in dividends. The company expects to repurchase shares worth at least $600 million in fiscal 2023.
Fiscal 2023 Outlook
Berry Global expects adjusted earnings of $7.30-$7.80 per share in fiscal 2023. The mid-point of the guided range — $7.55 — lies above the Zacks Consensus Estimate of $7.51.
BERY anticipates cash flow from operations of $1.4-$1.5 billion, while free cash flow is expected to be $800-$900 million in fiscal 2023. The company expects to reward shareholders with at least $700 million through dividends and share buybacks in fiscal 2023.
Zacks Rank & Key Picks
Berry Global currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the broader Industrial Products sector are as follows:
Allegion plc (ALLE - Free Report) presently sports a Zacks Rank #1 (Strong Buy). ALLE pulled off a trailing four-quarter earnings surprise of 8.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
The Zacks Consensus Estimate for Allegion’s fourth-quarter earnings has been revised downward by 2.8% in the past 60 days. The stock has gained 17.6% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank of 2 (Buy). VMI delivered a trailing four-quarter earnings surprise of 12.5%, on average.
The Zacks Consensus Estimate for Valmont’s fourth-quarter earnings estimate has been revised upward by a penny in the past 60 days. The stock has rallied 19.4% in the past six months.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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