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AptarGroup (ATR) Shares Decline as Q2 Earnings Lag Estimates
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Shares of AptarGroup, Inc. (ATR - Free Report) have fallen 6% since the company reported weaker-than- expected second-quarter 2021 earnings on Jul 29. Adjusted earnings per share was 91 cents, which missed the Zacks Consensus Estimate of 97 cents by a margin of 6% and came at the lower end of the company’s guided range of 91 cents to 99 cents. The bottom line, however, improved 7% year over year.
On a reported basis, earnings per share was 81 cents compared with the year-ago quarter’s 63 cents.
Total revenues increased 16% year over year to $811 million during the reported quarter. The top line beat the Zacks Consensus Estimate of $777 million. Core sales, excluding currency and acquisition effects, increased 10% year over year. The top line was driven by double-digit core growth in Beauty + Home and Food + Beverage segments, courtesy of increased demand for the company’s innovative dispensing solutions, and price actions taken to counter rising input costs.
AptarGroup, Inc. Price, Consensus and EPS Surprise
Cost of sales climbed 18% year over year to $523 million. Gross profit increased 12% year over year to $288 million. Gross margin contracted to 35.5% in the reported quarter compared with the prior-year quarter’s 36.8%.
Selling, research, development and administrative expenses climbed 14% year over year to $141 million. Adjusted operating income advanced 12% year over year to $83.2 million. Adjusted operating margin came in at 10.3% in the reported quarter, down from the year-ago quarter’s 10.6%. Adjusted EBITDA increased 8% year on year to $147.6 million in the second quarter.
Segmental Performance
Total revenues in the Pharma segment grew 87% year over year to $325 million. Adjusted operating income in the quarter declined 1.6% year over year to $84 million.
Total revenues in the Beauty + Home segment rose 20% year over year to $360 million. Adjusted operating income amounted to $13.6 million for the June-end quarter compared with the prior-year quarter’s $0.7 million.
Total revenues in the Food + Beverage segment increased 28% year over year to $125 million. Operating income was $9.8 million in second-quarter 2021, reflecting an improvement of 14% from $8.6 million in the year-ago quarter.
Financial Performance
AptarGroup reported cash and cash equivalents of $291.5 million as of Jun 30, 2021, down from $300 million as of Dec 31, 2020. The company generated $176 million of cash flow from operations in the first half of 2021 compared with the $228 million in the last-year comparable period. As of Jun 30, 2020, long-term debt was approximately $1,049 million, down from $1,055 million as of Dec 31, 2020.
The company has recently announced an agreement for the acquisition of a majority stake in Voluntis, a pioneer in digital therapeutics. It has also entered into a strategic collaboration with YAT, a Chinese online skincare company, to develop a range of products and services for the skincare market. The company agreed to acquire 80% of Weihai Hengyu Medical Products, adding elastomeric and plastic component manufacturing capabilities in China for injectable drug delivery.
Outlook
AptarGroup estimates third-quarter 2021 adjusted earnings per share in the range of 90 cents to 98 cents.
Price Performance
Image Source: Zacks Investment Research
Shares of the company have gained 8% in the past year, compared with the industry’s growth of 27.1%.
Zacks Rank and Stocks to Consider
AptarGroup currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
AptarGroup (ATR) Shares Decline as Q2 Earnings Lag Estimates
Shares of AptarGroup, Inc. (ATR - Free Report) have fallen 6% since the company reported weaker-than- expected second-quarter 2021 earnings on Jul 29. Adjusted earnings per share was 91 cents, which missed the Zacks Consensus Estimate of 97 cents by a margin of 6% and came at the lower end of the company’s guided range of 91 cents to 99 cents. The bottom line, however, improved 7% year over year.
On a reported basis, earnings per share was 81 cents compared with the year-ago quarter’s 63 cents.
Total revenues increased 16% year over year to $811 million during the reported quarter. The top line beat the Zacks Consensus Estimate of $777 million. Core sales, excluding currency and acquisition effects, increased 10% year over year. The top line was driven by double-digit core growth in Beauty + Home and Food + Beverage segments, courtesy of increased demand for the company’s innovative dispensing solutions, and price actions taken to counter rising input costs.
AptarGroup, Inc. Price, Consensus and EPS Surprise
AptarGroup, Inc. price-consensus-eps-surprise-chart | AptarGroup, Inc. Quote
Operational Update
Cost of sales climbed 18% year over year to $523 million. Gross profit increased 12% year over year to $288 million. Gross margin contracted to 35.5% in the reported quarter compared with the prior-year quarter’s 36.8%.
Selling, research, development and administrative expenses climbed 14% year over year to $141 million. Adjusted operating income advanced 12% year over year to $83.2 million. Adjusted operating margin came in at 10.3% in the reported quarter, down from the year-ago quarter’s 10.6%. Adjusted EBITDA increased 8% year on year to $147.6 million in the second quarter.
Segmental Performance
Total revenues in the Pharma segment grew 87% year over year to $325 million. Adjusted operating income in the quarter declined 1.6% year over year to $84 million.
Total revenues in the Beauty + Home segment rose 20% year over year to $360 million. Adjusted operating income amounted to $13.6 million for the June-end quarter compared with the prior-year quarter’s $0.7 million.
Total revenues in the Food + Beverage segment increased 28% year over year to $125 million. Operating income was $9.8 million in second-quarter 2021, reflecting an improvement of 14% from $8.6 million in the year-ago quarter.
Financial Performance
AptarGroup reported cash and cash equivalents of $291.5 million as of Jun 30, 2021, down from $300 million as of Dec 31, 2020. The company generated $176 million of cash flow from operations in the first half of 2021 compared with the $228 million in the last-year comparable period. As of Jun 30, 2020, long-term debt was approximately $1,049 million, down from $1,055 million as of Dec 31, 2020.
The company has recently announced an agreement for the acquisition of a majority stake in Voluntis, a pioneer in digital therapeutics. It has also entered into a strategic collaboration with YAT, a Chinese online skincare company, to develop a range of products and services for the skincare market. The company agreed to acquire 80% of Weihai Hengyu Medical Products, adding elastomeric and plastic component manufacturing capabilities in China for injectable drug delivery.
Outlook
AptarGroup estimates third-quarter 2021 adjusted earnings per share in the range of 90 cents to 98 cents.
Price Performance
Image Source: Zacks Investment Research
Shares of the company have gained 8% in the past year, compared with the industry’s growth of 27.1%.
Zacks Rank and Stocks to Consider
AptarGroup currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Industrial Products sector include Greif, Inc. (GEF - Free Report) , Lindsay Corp. (LNN - Free Report) and Pentair plc (PNR - Free Report) . While Greif and Lindsay sport a Zacks Rank #1 (Strong Buy), Pentair carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Greif has an anticipated earnings growth rate of 47.2% for fiscal 2021. The company’s shares have gained 29.9% in the past year.
Lindsay has an estimated earnings growth rate of 1% for the ongoing fiscal year. In a year's time, the company’s shares have rallied 22.3%.
Pentair has a projected earnings growth rate of 26% for 2021. The stock has appreciated 36.7% over the past year.