Berry Global Group, Inc. (BERY - Free Report) reported second-quarter fiscal 2024 (ended March 2024) adjusted earnings of $1.95 per share, which beat the Zacks Consensus Estimate of $1.90. The bottom line decreased 0.5% year over year.
Net sales of $3.07 billion missed the consensus estimate of $3.12 billion. The top line decreased 6.4% year over year due to a 2% dip in volumes and a 5% negative impact from lower resin costs.
Berry Global’s cost of goods sold decreased 6.5% to $2.5 billion. Selling, general and administrative expenses decreased 3.2% year over year to $213 million. The company reported an operating EBITDA of $522 million, down 4% year over year. Adjusted operating income decreased 9.7% to $308 million.
Segmental Discussion
Berry Global has announced its plan to go for a tax-free spin-off and merge the majority of its Health, Hygiene and Specialties segment (comprising the global nonwovens and films business) with Glatfelter Corporation (GLT - Free Report) . With this announcement and its focus on driving a positive product mix within the Engineered Materials segment into higher value products, BERY renamed the unit Flexibles.
Consumer Packaging - International sales amounted to $968.0 million (accounting for 31.5% of total sales), down 8.6% from the year-ago quarter’s figure. Our estimate for segmental revenues was $1 billion. The decline was due to the pass-through of lower resin prices and the impact of completed divestitures. Operating income of $3 million decreased 96% year over year.
Consumer Packaging - North America’s sales totaled $751.0 million (accounting for 24.4% of total sales) in the segment, down 3% year over year due to a 3% decline in volumes. Our estimate for segmental revenues was $764.6 million. Operating income declined 17.2% year over year to $77.0 million.
Revenues from the Health, Hygiene & Specialties segment amounted to $646.0 million (accounting for 21% of total sales), down 4.6% year over year due to a 2% decrease in volumes as a result of lower demand in hygiene and specialty markets. Our estimate for segmental revenues was $642.1 million. It reported operating income of $33.0 million, down 2.9% from the year-ago quarter.
Revenues from the Flexibles segment amounted to $711.0 million (accounting for 23.1% of total sales), down 8.6% year over year due to a 4% decrease in volumes as a result of softer demand in North American markets. Our estimate for segmental revenues was $704.4 million. Operating income was $95 million, down 4% year over year.
Balance Sheet and Cash Flow
At the end of the second quarter, Berry Global had cash and cash equivalents of $494 million compared with $1.2 billion at the end of fiscal 2023. Current and long-term debt totaled $8.7 billion compared with $9 billion at the end of fiscal 2023.
Berry Global did not generate any cash from operating activities in the second quarter. However, BERY used cash worth $233 million in the year-ago period. Capital expenditure totaled $333 million compared with $385 million in the prior-year quarter. In the first six months of fiscal 2024, the company reported a negative adjusted free cash flow of $333 million compared with a negative cash flow of $217 million in the year-ago period.
BERY repurchased 1.4 million shares for approximately $81 million. It also paid dividends worth $70 million in the first six months of fiscal 2024.
Fiscal 2024 Guidance
Berry Global reaffirmed its outlook. It continues to expect adjusted earnings to be in the range of $7.35-$7.85 per share in fiscal 2024.
BERY expects cash flow from operations to be in the band of $1.35-$1.45 billion. It continues to anticipate free cash flow in the $800-$900 million range. The company remains committed to debt reduction along with returning capital to shareholders through share repurchases and dividends.
Zacks Rank
BERY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Industrial Companies
IDEX Corporation’s (IEX - Free Report) second-quarter adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.75. On a year-over-year basis, the bottom line decreased approximately 10.1%.
IDEX’s net sales of $800.5 million underperformed the consensus estimate of $805 million. The top line also decreased 5.3% year over year.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter adjusted earnings of $1.00 per share surpassed the Zacks Consensus Estimate of 99 cents. The bottom line increased 6% on a year-over-year basis.
Net sales of $978.8 million missed the consensus estimate of $995 million. However, the top line inched up 1% year over year, driven by strong demand for commercial water heaters in North America.
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Berry Global Group, Inc. (BERY - Free Report) reported second-quarter fiscal 2024 (ended March 2024) adjusted earnings of $1.95 per share, which beat the Zacks Consensus Estimate of $1.90. The bottom line decreased 0.5% year over year.
Net sales of $3.07 billion missed the consensus estimate of $3.12 billion. The top line decreased 6.4% year over year due to a 2% dip in volumes and a 5% negative impact from lower resin costs.
Berry Global’s cost of goods sold decreased 6.5% to $2.5 billion. Selling, general and administrative expenses decreased 3.2% year over year to $213 million. The company reported an operating EBITDA of $522 million, down 4% year over year. Adjusted operating income decreased 9.7% to $308 million.
Segmental Discussion
Berry Global has announced its plan to go for a tax-free spin-off and merge the majority of its Health, Hygiene and Specialties segment (comprising the global nonwovens and films business) with Glatfelter Corporation (GLT - Free Report) . With this announcement and its focus on driving a positive product mix within the Engineered Materials segment into higher value products, BERY renamed the unit Flexibles.
Consumer Packaging - International sales amounted to $968.0 million (accounting for 31.5% of total sales), down 8.6% from the year-ago quarter’s figure. Our estimate for segmental revenues was $1 billion. The decline was due to the pass-through of lower resin prices and the impact of completed divestitures. Operating income of $3 million decreased 96% year over year.
Consumer Packaging - North America’s sales totaled $751.0 million (accounting for 24.4% of total sales) in the segment, down 3% year over year due to a 3% decline in volumes. Our estimate for segmental revenues was $764.6 million. Operating income declined 17.2% year over year to $77.0 million.
Revenues from the Health, Hygiene & Specialties segment amounted to $646.0 million (accounting for 21% of total sales), down 4.6% year over year due to a 2% decrease in volumes as a result of lower demand in hygiene and specialty markets. Our estimate for segmental revenues was $642.1 million. It reported operating income of $33.0 million, down 2.9% from the year-ago quarter.
Revenues from the Flexibles segment amounted to $711.0 million (accounting for 23.1% of total sales), down 8.6% year over year due to a 4% decrease in volumes as a result of softer demand in North American markets. Our estimate for segmental revenues was $704.4 million. Operating income was $95 million, down 4% year over year.
Balance Sheet and Cash Flow
At the end of the second quarter, Berry Global had cash and cash equivalents of $494 million compared with $1.2 billion at the end of fiscal 2023. Current and long-term debt totaled $8.7 billion compared with $9 billion at the end of fiscal 2023.
Berry Global did not generate any cash from operating activities in the second quarter. However, BERY used cash worth $233 million in the year-ago period. Capital expenditure totaled $333 million compared with $385 million in the prior-year quarter. In the first six months of fiscal 2024, the company reported a negative adjusted free cash flow of $333 million compared with a negative cash flow of $217 million in the year-ago period.
BERY repurchased 1.4 million shares for approximately $81 million. It also paid dividends worth $70 million in the first six months of fiscal 2024.
Fiscal 2024 Guidance
Berry Global reaffirmed its outlook. It continues to expect adjusted earnings to be in the range of $7.35-$7.85 per share in fiscal 2024.
BERY expects cash flow from operations to be in the band of $1.35-$1.45 billion. It continues to anticipate free cash flow in the $800-$900 million range. The company remains committed to debt reduction along with returning capital to shareholders through share repurchases and dividends.
Zacks Rank
BERY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Industrial Companies
IDEX Corporation’s (IEX - Free Report) second-quarter adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.75. On a year-over-year basis, the bottom line decreased approximately 10.1%.
IDEX’s net sales of $800.5 million underperformed the consensus estimate of $805 million. The top line also decreased 5.3% year over year.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter adjusted earnings of $1.00 per share surpassed the Zacks Consensus Estimate of 99 cents. The bottom line increased 6% on a year-over-year basis.
Net sales of $978.8 million missed the consensus estimate of $995 million. However, the top line inched up 1% year over year, driven by strong demand for commercial water heaters in North America.
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Zacks Investment Research has released a Special Report to help you pursue massive profits from the world’s first and largest decentralized form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%.
Zacks predicts another significant surge. Click below for Bitcoin: A Tumultuous Yet Resilient History.
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