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) Q2 Earnings & Revenues Surpass Estimates
Read MoreHide Full Article
Sealed Air Corporation (SEE - Free Report) reported second-quarter 2020 adjusted earnings per share of 76 cents, surpassing the Zacks Consensus Estimate of 54 cents. However, the bottom line declined 5% year over year. Benefits from the company’s Reinvent SEE initiatives, favorable price cost spread, and contribution from the Automated acquisition was partially offset by lower organic sales volume, unfavorable foreign currency translation and higher adjusted tax rate.
Including special items, the company reported net earnings per share of 64 cents compared with the prior-year quarter figure of 16 cents.
Total revenues declined 1% year over year to $1,151 million in the reported quarter. The top line, however, beat the Zacks Consensus Estimate of $1,076 million. Currency negatively impacted sales by 4%.
Sealed Air Corporation Price, Consensus and EPS Surprise
Cost of sales decreased 5% year over year to $761 million. Gross profit improved 3% year over year to $390 million. Gross margin was 33.9% compared with 32.6% in the prior-year quarter.
SG&A expenses plunged 31% to $185 million year over year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $260 million in the quarter, up 10% from $237 million in the prior-year quarter. Adjusted EBITDA margin was 22.6% compared with 20.4% in the prior-year quarter, driven by the company’s Reinvent SEE initiatives, favorable price cost spread, and contribution from the Automated acquisition. This was partially offset by lower organic sales volume and unfavorable foreign currency translation.
Segment Performance
Food: Net sales declined 5% year over year to $673 million. Adjusted EBITDA improved 9% year over year to $169 million.
Protective: The segment reported net sales of $478 million in the reported quarter, up 6% from the prior-year quarter. Adjusted EBITDA was up 9% year over year to $91 million.
Financial Updates
Cash and cash equivalents were at around $290 million as of Jun 30, 2020, up from $262 million as of Dec 31, 2019. Cash flow from operating activities was around $213 million in the first half of 2020 compared with $169 million in the prior-year period. As of Jun 30, 2020, Sealed Air’s net debt was $3.5 billion, down from $3.6 billion as of Dec 31, 2019.
2020 Guidance
For 2020, Sealed Air now expects net sales in the range of $4.725-$4.775 billion. Foreign currency is now expected to have a negative impact on net sales of approximately $120 million. In February, the company had provided sales guidance of $4.9 billion to $4.95 billion, which included an estimated unfavorable currency impact of approximately $40 million.
Adjusted EBITDA is expected between $1.01 billion and $1.03 billion, same as the February 2020 guidance. However, foreign currency is now expected to have a negative impact of approximately $25 million higher than the prior expectation of an unfavorable impact of $8 million. Adjusted earnings per share is expected in the band of $2.85- $2.95. Free cash flow is expected in the range of $350-$375 million, compared with $350 million communicated in February 2020.
Share Price Performance
Over the past three months, Sealed Air’s shares have gained 28.5%, compared with the industry’s growth of 16.2%.
Zacks Rank & Stocks to Consider
Sealed Air currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector include Silgan Holdings, Inc. (SLGN - Free Report) , IIVI Incorporated and Energous Corporation (WATT - Free Report) . While Silgan and IIVI sport a Zacks Rank #1 (Strong Buy), Energous carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Silgan has a projected earnings growth rate of 31.5% for the current year. The company’s shares have gained 13% in the past three months.
IIVI has an estimated earnings growth rate of 29% for the ongoing year. The company’s shares have rallied 51% in three months’ time.
Energous has an expected earnings growth rate of 44% for 2020. The stock has surged 60% over the past three months.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Sealed Air (SEE) Q2 Earnings & Revenues Surpass Estimates
Sealed Air Corporation (SEE - Free Report) reported second-quarter 2020 adjusted earnings per share of 76 cents, surpassing the Zacks Consensus Estimate of 54 cents. However, the bottom line declined 5% year over year. Benefits from the company’s Reinvent SEE initiatives, favorable price cost spread, and contribution from the Automated acquisition was partially offset by lower organic sales volume, unfavorable foreign currency translation and higher adjusted tax rate.
Including special items, the company reported net earnings per share of 64 cents compared with the prior-year quarter figure of 16 cents.
Total revenues declined 1% year over year to $1,151 million in the reported quarter. The top line, however, beat the Zacks Consensus Estimate of $1,076 million. Currency negatively impacted sales by 4%.
Sealed Air Corporation Price, Consensus and EPS Surprise
Sealed Air Corporation price-consensus-eps-surprise-chart | Sealed Air Corporation Quote
Cost and Margins
Cost of sales decreased 5% year over year to $761 million. Gross profit improved 3% year over year to $390 million. Gross margin was 33.9% compared with 32.6% in the prior-year quarter.
SG&A expenses plunged 31% to $185 million year over year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $260 million in the quarter, up 10% from $237 million in the prior-year quarter. Adjusted EBITDA margin was 22.6% compared with 20.4% in the prior-year quarter, driven by the company’s Reinvent SEE initiatives, favorable price cost spread, and contribution from the Automated acquisition. This was partially offset by lower organic sales volume and unfavorable foreign currency translation.
Segment Performance
Food: Net sales declined 5% year over year to $673 million. Adjusted EBITDA improved 9% year over year to $169 million.
Protective: The segment reported net sales of $478 million in the reported quarter, up 6% from the prior-year quarter. Adjusted EBITDA was up 9% year over year to $91 million.
Financial Updates
Cash and cash equivalents were at around $290 million as of Jun 30, 2020, up from $262 million as of Dec 31, 2019. Cash flow from operating activities was around $213 million in the first half of 2020 compared with $169 million in the prior-year period. As of Jun 30, 2020, Sealed Air’s net debt was $3.5 billion, down from $3.6 billion as of Dec 31, 2019.
2020 Guidance
For 2020, Sealed Air now expects net sales in the range of $4.725-$4.775 billion. Foreign currency is now expected to have a negative impact on net sales of approximately $120 million. In February, the company had provided sales guidance of $4.9 billion to $4.95 billion, which included an estimated unfavorable currency impact of approximately $40 million.
Adjusted EBITDA is expected between $1.01 billion and $1.03 billion, same as the February 2020 guidance. However, foreign currency is now expected to have a negative impact of approximately $25 million higher than the prior expectation of an unfavorable impact of $8 million. Adjusted earnings per share is expected in the band of $2.85- $2.95. Free cash flow is expected in the range of $350-$375 million, compared with $350 million communicated in February 2020.
Share Price Performance
Over the past three months, Sealed Air’s shares have gained 28.5%, compared with the industry’s growth of 16.2%.
Zacks Rank & Stocks to Consider
Sealed Air currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector include Silgan Holdings, Inc. (SLGN - Free Report) , IIVI Incorporated and Energous Corporation (WATT - Free Report) . While Silgan and IIVI sport a Zacks Rank #1 (Strong Buy), Energous carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Silgan has a projected earnings growth rate of 31.5% for the current year. The company’s shares have gained 13% in the past three months.
IIVI has an estimated earnings growth rate of 29% for the ongoing year. The company’s shares have rallied 51% in three months’ time.
Energous has an expected earnings growth rate of 44% for 2020. The stock has surged 60% over the past three months.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>