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Greif (GEF) to Report Q3 Earnings: What's in the Cards?

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Greif, Inc. (GEF - Free Report) is scheduled to release third-quarter fiscal 2021 (ended as of Jul 31, 2021) financial numbers, after the closing bell on Sep 1.

Where are the Q3 Estimates Treading?

The Zacks Consensus Estimate for the company’s earnings is pegged at $1.60 per share, suggesting year-over-year growth of 88.2%. Earnings estimates for the fiscal third quarter have been stable, of late.

The Zacks Consensus Estimate for total revenues for the quarter under review is pinned at $1.43 billion, calling for an increase of 32.2% from the year-ago quarter.

Q2 Results

In the last reported quarter, the company’s earnings and revenues beat the respective Zacks Consensus Estimate and increased year over year. Greif has a trailing four-quarter average earnings surprise of 6.02%.

Key Factors

Greif’s fiscal third-quarter performance is likely to have benefited from its focus on operational execution and restructuring activities, which includes optimizing and integrating operations in the Paper Packaging & Services segment, rationalizing operations and closing underperforming assets in the Global Industrial Packaging segment. Also, implementation of price increase to combat inflated costs is likely to have driven bottom-line growth in the to-be-reported quarter.

The Zacks Consensus Estimate for the Global Industrial Packaging segment’s sales is pegged at $850 million for the to-be-reported quarter, indicating 55% year-over-year growth. Adjusted operating profit for the segment is estimated at $104 million, indicating a year-over-year surge of 145%. The segment is gaining from strong volume across its key substrates. Meanwhile, rising restructuring costs might have negatively impacted the segment’s performance during the quarter.

The company’s Paper Packaging segment is likely to have benefited from the Caraustar acquisition and various new capital growth projects during the quarter in discussion. Given the pandemic-related crisis, increased packaging demand for food, pharmaceutical and household goods industries are anticipated to have contributed to the segment’s performance. Higher restructuring costs might have hurt the segment. The Zacks Consensus Estimate for the segment’s quarterly net sales is currently pegged at $578 million, calling for year-over-year growth of 26%. Adjusted operating profit for the segment is estimated at $54 million, calling for significant growth of 306%.

The Zacks Consensus Estimate for the Land Management segment’s revenues stands at $4 million compared with the year-ago quarter’s $5.9 million. The segment is expected to report an adjusted operating income of $1 million compared to the year-ago quarter’s $2 million.

Nevertheless, higher Old Corrugated Container (OCC) costs, inflated transportation and insurance costs might have marred the company’s margin during the fiscal third quarter.

Greif, Inc. Price and EPS Surprise

Greif, Inc. Price and EPS Surprise

Greif, Inc. price-eps-surprise | Greif, Inc. Quote

What Our Zacks Model Indicates

Our proven model doesn’t conclusively predict an earnings beat for Greif 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 Greif is 0.00%.

Zacks Rank: Greif currently carries a Zacks Rank of 3.

Share Price Performance

Greif’s shares have gained 82% in the past year, outperforming the industry’s growth of 31.2%.

Zacks Investment Research
Image Source: Zacks Investment Research

Stocks Worth a Look

Here are some other stocks worth considering as these have the right combination of elements to post an earnings beat in the upcoming releases.

American Assets Trust, Inc. (AAT - Free Report) has an Earnings ESP of +2.41% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ACCO Brands Corporation (ACCO - Free Report) , currently a Zacks #2 Ranked stock, has an Earnings ESP of +1.47%.

Alliance Data Systems Corporation (ADS - Free Report) has an Earnings ESP of +1.98% and carries a Zacks Rank #3, currently.