We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sealed Air (SEE) Beats on Q3 Earnings & Sales, Raises '21 View
Read MoreHide Full Article
Sealed Air Corporation (SEE - Free Report) reported third-quarter 2021 adjusted earnings per share of 86 cents, beating the Zacks Consensus Estimate of 82 cents. The bottom line improved 4.8%, year over year.
Including special items, the company delivered net earnings per share of 71 cents compared with the prior-year quarter’s 85 cents.
Total revenues were up 14% year over year to $1,407 million in the reported quarter. The top line also beat the Zacks Consensus Estimate of $1,383 million.
Cost and Margins
Cost of sales climbed 20.4% year over year to $1,003 million. The gross profit came in at $404 million compared with the year-ago quarter’s $405 million. The gross margin contracted to 28.7% from the prior-year quarter’s 32.6%.
The SG&A expenses declined 4.5% to $190 million, year over year. The adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $271 million in the quarter, up 4% from the prior-year period. The adjusted EBITDA margin was 19.2% compared with the prior-year quarter’s 21%. The EBITDA margin was impacted by rising material and freight costs, partly offset by lower employee-related expenses and benefits related to an indirect tax recovery in Brazil.
Sealed Air Corporation Price, Consensus and EPS Surprise
Food: Net sales jumped 13%, year over year, to $797 million. The company witnessed strong demand for automation andimprovement in food service. The adjusted EBITDA was up 11%, year over year, to $169 million. Volume growth and productivity improvements were offset by negative price/cost related to higher input costs.
Protective: The segment reported net sales of $609 million during the quarter under review, up 14% from the prior-year period on continued demand in the automation and industrial markets. The adjusted EBITDA decreased 5.5% year over year to $103 million.
Financial Updates
Cash flow from operating activities was $378 million in the nine-month period ended on Sep 30, 2021 compared with the year-ago period’s $410 million.
The company paid cash dividends of $86 million during the first nine months of 2021 and repurchased shares worth $329 million.
As of Sep 30, 2021, Sealed Air’s net debt was $3.4 billion, up from $3.2 billion as of Dec 31, 2020. As of the end of the quarter, the company had $1.5 billion of liquidity available, which comprised $394 million in cash and $1.14 billion of undrawn, committed credit facilities.
2021 Guidance Updated
For 2021, Sealed Air expects net sales of $5.5 billion, indicating an increase of 12% as reported and 11% in constant dollars. Management projected net sales between $5.4 billion and $5.5 billion in its prior guidance. The company now expects adjusted EBITDA to lie between $1.12 billion and $1.14 billion for the current year. The adjusted earnings per share are now anticipated in the band of $3.50 to $3.60. The company had earlier provided a guidance range of $3.45-$3.60. Sealed Air projects free cash flow to be between $520 million and $540 million for the ongoing year.
Share Price Performance
So far this year, Sealed Air’s shares have gained 30.2%, outperforming the industry’s growth of 10.1%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Sealed Air currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
Sealed Air (SEE) Beats on Q3 Earnings & Sales, Raises '21 View
Sealed Air Corporation (SEE - Free Report) reported third-quarter 2021 adjusted earnings per share of 86 cents, beating the Zacks Consensus Estimate of 82 cents. The bottom line improved 4.8%, year over year.
Including special items, the company delivered net earnings per share of 71 cents compared with the prior-year quarter’s 85 cents.
Total revenues were up 14% year over year to $1,407 million in the reported quarter. The top line also beat the Zacks Consensus Estimate of $1,383 million.
Cost and Margins
Cost of sales climbed 20.4% year over year to $1,003 million. The gross profit came in at $404 million compared with the year-ago quarter’s $405 million. The gross margin contracted to 28.7% from the prior-year quarter’s 32.6%.
The SG&A expenses declined 4.5% to $190 million, year over year. The adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $271 million in the quarter, up 4% from the prior-year period. The adjusted EBITDA margin was 19.2% compared with the prior-year quarter’s 21%. The EBITDA margin was impacted by rising material and freight costs, partly offset by lower employee-related expenses and benefits related to an indirect tax recovery in Brazil.
Sealed Air Corporation Price, Consensus and EPS Surprise
Sealed Air Corporation price-consensus-eps-surprise-chart | Sealed Air Corporation Quote
Segment Performance
Food: Net sales jumped 13%, year over year, to $797 million. The company witnessed strong demand for automation andimprovement in food service. The adjusted EBITDA was up 11%, year over year, to $169 million. Volume growth and productivity improvements were offset by negative price/cost related to higher input costs.
Protective: The segment reported net sales of $609 million during the quarter under review, up 14% from the prior-year period on continued demand in the automation and industrial markets. The adjusted EBITDA decreased 5.5% year over year to $103 million.
Financial Updates
Cash flow from operating activities was $378 million in the nine-month period ended on Sep 30, 2021 compared with the year-ago period’s $410 million.
The company paid cash dividends of $86 million during the first nine months of 2021 and repurchased shares worth $329 million.
As of Sep 30, 2021, Sealed Air’s net debt was $3.4 billion, up from $3.2 billion as of Dec 31, 2020. As of the end of the quarter, the company had $1.5 billion of liquidity available, which comprised $394 million in cash and $1.14 billion of undrawn, committed credit facilities.
2021 Guidance Updated
For 2021, Sealed Air expects net sales of $5.5 billion, indicating an increase of 12% as reported and 11% in constant dollars. Management projected net sales between $5.4 billion and $5.5 billion in its prior guidance. The company now expects adjusted EBITDA to lie between $1.12 billion and $1.14 billion for the current year. The adjusted earnings per share are now anticipated in the band of $3.50 to $3.60. The company had earlier provided a guidance range of $3.45-$3.60. Sealed Air projects free cash flow to be between $520 million and $540 million for the ongoing year.
Share Price Performance
So far this year, Sealed Air’s shares have gained 30.2%, outperforming the industry’s growth of 10.1%.
Zacks Rank and Stocks to Consider
Sealed Air currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the Industrial Products sector include Deere & Company (DE - Free Report) , Worthington Industries, Inc. (WOR - Free Report) and DXP Enterprises, Inc. (DXPE - Free Report) . All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Deere has an anticipated earnings growth rate of 117.6% for fiscal 2021. The company’s shares have increased 34.4%, year to date.
Worthington has an estimated earnings growth rate of 3.6% for fiscal 2022. Year to date, the company’s shares have gained 9.8%.
DXP Enterprises has a projected earnings growth rate of 77.6% for the current year. The stock has appreciated around 49%, so far this year.