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Sealed Air (SEE) to Report Q1 Earnings: What's in Store?

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Sealed Air Corporation (SEE - Free Report) is scheduled to report first-quarter 2021 results on May 4, before the opening bell.

Q1 Estimates

The Zacks Consensus Estimate for the first-quarter revenues is pegged at $1.22 billion, suggesting growth of 4% year over year. The consensus mark for quarterly earnings currently stands at 71 cents, indicating a decline of 2.7% from the prior-year quarter.

Q4 Performance

Sealed Air’s fourth-quarter earnings and revenues beat the respective Zacks Consensus Estimates and increased year over year. The company has a trailing four-quarter earnings surprise of 24.9%, on average.

Sealed Air Corporation Price and EPS Surprise Sealed Air Corporation Price and EPS Surprise

Sealed Air Corporation price-eps-surprise | Sealed Air Corporation Quote

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Sealed Air this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Sealed Air is -3.01%.

Zacks Rank: The company currently carries a Zacks Rank of 3.

Key Factors to Note

Sealed Air first-quarter performance is likely to have benefited from elevated demand for packaging of food, beverage and healthcare products, as well as the e-commerce boom as customers prefer to stay home amid the coronavirus-induced crisis. Notably, the packaging of protein, foods, fluids and goods for the medical and life-sciences industries account for 64% of the company’s revenues, while e-commerce sales contribute around 14%. Further, gains from the company’s acquisitions, including Automated Packaging Systems, AFP and Fagerdala, are likely to get reflected in the to-be-reported quarter’s results.

In December 2018, Sealed Air announced a reformation plan — Reinvent SEE Strategy — along with a fresh restructuring program to boost growth and earnings. The strategy is focused on innovations, SG&A productivity, product-cost efficiency, channel optimization and customer-service enhancements.

Savings from these initiatives are likely to have contributed to the operating margin and thus, are anticipated to get reflected in the first-quarter results. However, higher raw material costs and freight costs might have weighed on the company’s quarterly performance.

Segment Estimates

The Zacks Consensus Estimate for the Food Care segment’s first-quarter net sales is pegged at $707 million, indicating year-over-year growth of 2%. The Zacks Consensus Estimate for the segment’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) is pegged at $155 million, suggesting a decline of 1% from the prior-year quarter. In the segment, the retail channel and protein exports are expected to have remained strong through the quarter. However, weakness in food service and restaurants might have weighed on the segment’s performance.

The Zacks Consensus Estimate for the Product Care segment’s net sales is pegged at $514 million for the March-end quarter, indicating year-over-year improvement of 6%. The Zacks Consensus Estimate for the segment’s adjusted EBITDA is $96 million, suggesting growth of 3% from the year-ago quarter. Continued growth in e-commerce and fulfillment and the recovery in industrial end markets are likely to have contributed to the to-be-reported quarter’s performance.

Price Performance

Over the past year, shares of Sealed Air have gained 73.8% compared with the industry’s growth of 47.3%.

Stocks Poised to Beat Earnings Estimates

Here are some Industrial Products stocks which you may consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.

Zebra Technologies Corporation (ZBRA - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Middleby Corporation (MIDD - Free Report) has a Zacks Rank of 2 and an Earnings ESP of +0.21%, at present.

Nordson Corporation (NDSN - Free Report) , currently a Zacks #3 Ranked stock, has an Earnings ESP of +0.40%.

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