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Amcor (AMCR) FY2021 Earnings Meet Estimates, Improve Y/Y

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Amcor Plc (AMCR - Free Report) reported fiscal 2021 (ended Jun 30, 2021) adjusted earnings per share of 74 cents, in line with the Zacks Consensus Estimate. Earnings improved 16% from the adjusted earnings of 64 cents per share in fiscal 2020. In constant currency terms, the bottom line climbed 16% year over year. This improvement can be attributed to synergies from the Bemis acquisition.

Including special items, the company reported net earnings per share of 60 cents compared with the prior-year figure of 38 cents.

Total revenues increased 3% year over year to $12.86 billion in fiscal 2021. The top line beat the Zacks Consensus Estimate of $12.69 billion. Sales climbed 2% year over year in constant currency terms. Volumes improved 2% than the prior fiscal year.

Adjusted operating income in fiscal 2021 was $1,621 million compared with the prior fiscal year’s $1,497 million. Adjusted operating margin was 13% compared with the prior fiscal year’s 12%. Adjusted EBITDA was $2,028 million, up 6% year over year.

Amcor PLC Price, Consensus and EPS Surprise

Amcor PLC Price, Consensus and EPS Surprise

Amcor PLC price-consensus-eps-surprise-chart | Amcor PLC Quote

Segment Performance

Flexibles: Net sales were up 3% year over year to $10billion in fiscal 2021. Adjusted operating income increased 10% year over year to $1,427 million for fiscal 2021.

Rigid Packaging: The segment reported net sales of $2.8billion in fiscal 2021, up 4% year over year. Adjusted operating income climbed 6% year over year to $299 million.

Financial Updates

As of fiscal 2021 end, Amcor had $850 million of cash and cash equivalents compared with $723 million as of the end of the prior fiscal year.

Net cash flow from operating activities was around $1,461 million in fiscal 2021 compared with the $1,384 million seen in the prior fiscal year. Adjusted free cash flow (before dividends) was $1,099 million in fiscal 2021 compared with the prior fiscal year’s $1,220 million.

As of Jun 30, 2021, Amcor’s net debt was $5,439 million compared with $5,491 million as of Jun 30, 2020.

Amcor completed a $350-million share-buyback program in fiscal 2021. Shares repurchased during fiscal 2021 led to a 2% reduction in total number of its issued and outstanding shares. The company has also hiked its annual dividend to 47 cents per share.

Update on Bemis Integration

On Jun 11, 2019, Amcor had completed the all-stock acquisition of Bemis Company. The Bemis integration is progressing well with pre-tax synergy benefits of $75 million realized in fiscal 2021 — ahead of the targeted $65 million. The company expects to exceed the original pre-tax synergy benefits target of $180 million by at least 10% by the end of fiscal 2022.

Fiscal 2022 Guidance

Amcor expects adjusted constant currency earnings per share growth of approximately 7-11% in fiscal 2022. The company projects adjusted free cash flow between $1.1 billion and $1.2 billion in fiscal 2022.

Share Price Performance

Year to date, Amcor’s shares have gained 4.9%, compared with the industry’s growth of 10.4%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

Amcor currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Industrial Products sector include Encore Wire Corporation (WIRE - Free Report) , Lindsay Corporation (LNN - Free Report) and Lincoln Electric Holdings, Inc. (LECO - Free Report) . All these companies sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Encore Wire has a projected earnings growth rate of 332.6% for fiscal 2021. So far this year, the company’s shares have gained 45%.

Lindsay has an estimated earnings growth rate of 17.3% for the ongoing year. The company’s shares have gained 35% so far this year.

Lincoln Electric has an expected earnings growth rate of 45.1% for 2021. The stock has appreciated 22% year to date.