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Sealed Air (SEE) to Report Q3 Earnings: What's in the Offing?

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Sealed Air Corporation (SEE - Free Report) is scheduled to report third-quarter 2021 results on Nov 2, before the opening bell.

Q3 Estimates

The Zacks Consensus Estimate for the third-quarter revenues is pegged at $1.38 billion, suggesting growth of 11.7% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for quarterly earnings currently stands at 82 cents, indicating no change from the year-ago period’s reported figure.

Q2 Performance

Sealed Air’s second-quarter earnings missed the Zacks Consensus Estimate but revenues beat the same. Both the earnings and sales figures increased year over year. The company has a trailing four-quarter earnings surprise of 10.9%, on average.

Key Factors to Note

Sealed Air’s third-quarter performance is likely to have benefited from elevated demand for packaging of food, beverage and healthcare products as well as surging e-commerce activities as customers prefer to stay indoors amid the coronavirus crisis. Around 63% of the company’s revenues comes in from packaging of protein, foods, fluids and goods for the medical and life-sciences industries while e-commerce sales contribute to around 14%. Further, gains from the company’s acquisitions including Automated Packaging Systems, AFP, Inc. and Fagerdala are likely to get reflected in the to-be-reported quarter’s top-line results.

In December 2018, Sealed Air announced a reformation plan called 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 aided the operating margin performance during the September quarter. 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 segment’s third-quarter net sales is pegged at $785 million, calling for growth of 11.3% from the prior-year period’s reported number. The Zacks Consensus Estimate for the segment’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) is pegged at $155 million, suggesting an increase of 2% from the prior-year quarter’s reported figure.

In the segment, the retail channel and protein exports are expected to have been strong through the quarter. Food service is also anticipated to have witnessed recovery on the reopening of restaurants and other public venues.

The Zacks Consensus Estimate for the Protective Packaging segment’s net sales is pegged at $605 million for the July-September period, indicating an improvement of 13.5% from the year-ago period’s actuals. The Zacks Consensus Estimate for the segment’s adjusted EBITDA is $115 million, suggesting growth of 5.5% from the year-earlier period’s reading.

Continued growth in e-commerce and fulfillment, and higher demand in the industrial end markets are likely to have boosted the segment’s to-be-reported quarter’s performance. Overall, strong demand for automated equipment and sustainable packaging solutions continue to fuel growth in the food and protected packaging segments.

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 Indicates

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: Sealed Air has an Earnings ESP of -1.67%.

Zacks Rank: Sealed Air currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Price Performance

Over the past year, shares of Sealed Air have gained 46.5%, outperforming the industry’s growth of 30.3%.

Zacks Investment ResearchImage Source: Zacks Investment Research

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 beat on earnings in their upcoming releases.

Tetra Tech, Inc. (TTEK - Free Report) has an Earnings ESP of +0.50% and a Zacks Rank of 2 at present.

Deere & Company (DE - Free Report) , currently a Zacks #2 Ranked stock, has an Earnings ESP of +5.55%.

OI Glass, Inc. (OI - Free Report) has an Earnings ESP of +1.05% and a Zacks Rank #3, currently.

In-Depth Zacks Research for the Tickers Above

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OI Glass, Inc. (OI) - free report >>

Tetra Tech, Inc. (TTEK) - free report >>

Deere & Company (DE) - free report >>

Sealed Air Corporation (SEE) - free report >>