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Sealed Air (SEE) Q4 Earnings Miss, Revenues Beat Estimates
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Sealed Air Corporation (SEE - Free Report) reported fourth-quarter 2021 adjusted earnings per share of $1.12, missing the Zacks Consensus Estimate of $1.14. However, the bottom line improved 26% year over year on higher volumes and a favorable price/cost spread.
Including special items, the company delivered net earnings per share of $1.12 compared with the prior-year quarter’s 89 cents.
Total revenues were up 14% year over year to $1,531 million in the reported quarter. The improvement can be attributed to higher volumes and favorable price across all regions. The top line beat the Zacks Consensus Estimate of $1,496 million.
Sealed Air Corporation Price, Consensus and EPS Surprise
Cost of sales climbed 15% year over year to $1,056 million. Gross profit came in at $475 million compared with the year-ago quarter’s $424 million. Gross margin contracted to 31.0% from the prior-year quarter’s 31.7%.
The SG&A expenses increased 5% from the last-year quarter to $205 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $330 million in the quarter, up 18% from the prior-year period. Adjusted EBITDA margin was 21.5% compared with the prior-year quarter’s 20.8%, courtesy of favorable price/cost spread and higher volumes.
Segment Performance
Food: Net sales jumped 16% year over year to $877 million. The segment reported strong volumes across all regions, attributed to favorable demand in food service and automated equipment solutions. The adjusted EBITDA was $204 million, up 20% from the last year’s quarter on volume growth and positive price/cost spread.
Protective: The segment reported net sales of $655 million during the quarter under review, up 12% from the prior-year quarter. The divestiture of Reflectix and currency fluctuation had an unfavorable impact of 1% each. The segment’s adjusted EBITDA increased 10% year over year to $126 million, aided by favorable price/cost spread, partially offset by higher operating costs.
Financial Updates
Cash flow from operating activities was $710 million in 2021 compared with the prior year’s $737 million. The company paid cash dividends of $116 million in 2021 and also repurchased shares for $403 million.
As of Dec 31, 2021, Sealed Air’s net debt was $3.1 billion, down from $3.2 billion as of Dec 31, 2020. As of the end of 2021, the company had $1.7 billion of liquidity available, which comprised $561 million in cash and $1.14 billion of undrawn, committed credit facilities.
2021 Results
Sealed Air’s adjusted earnings per share improved 11% year over year to $3.55 in 2021. The bottom line, however, missed the Zacks Consensus Estimate of $3.57. Including one-time items, the company delivered earnings per share of $3.55 in 2021 compared with earnings per share of $3.19 in 2020. Sales rose 13% year over year to $5,534 million and beat the Zacks Consensus Estimate of $5,498 million.
2022 Guidance
For 2022, Sealed Air expects net sales between $5.8 billion and $6 billion, indicating an increase of 5-8%. It factors in an unfavorable currency impact of approximately 2% and an unfavorable divestiture impact of approximately 1%.
The company anticipates adjusted EBITDA between $1.20 billion and $1.24 billion for the current year. The adjusted earnings per share are now forecast in the band of $3.95 to $4.15. Sealed Air projects free cash flow to be $510-$550 million for the ongoing year.
Share Price Performance
Image Source: Zacks Investment Research
In a year's time Sealed Air’s shares have gained 47.7%, compared with the industry’s growth of 8.7%.
Zacks Rank and Other Stocks to Consider
Sealed Air currently carries a Zacks Rank #2 (Buy).
Dover’s fourth-quarter 2021 adjusted EPS increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.
Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4%. DOV’s shares have rallied around 35% in a year.
Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.
Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 12%.
Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.
Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 23.7% in a year.
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Sealed Air (SEE) Q4 Earnings Miss, Revenues Beat Estimates
Sealed Air Corporation (SEE - Free Report) reported fourth-quarter 2021 adjusted earnings per share of $1.12, missing the Zacks Consensus Estimate of $1.14. However, the bottom line improved 26% year over year on higher volumes and a favorable price/cost spread.
Including special items, the company delivered net earnings per share of $1.12 compared with the prior-year quarter’s 89 cents.
Total revenues were up 14% year over year to $1,531 million in the reported quarter. The improvement can be attributed to higher volumes and favorable price across all regions. The top line beat the Zacks Consensus Estimate of $1,496 million.
Sealed Air Corporation Price, Consensus and EPS Surprise
Sealed Air Corporation price-consensus-eps-surprise-chart | Sealed Air Corporation Quote
Cost and Margins
Cost of sales climbed 15% year over year to $1,056 million. Gross profit came in at $475 million compared with the year-ago quarter’s $424 million. Gross margin contracted to 31.0% from the prior-year quarter’s 31.7%.
The SG&A expenses increased 5% from the last-year quarter to $205 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $330 million in the quarter, up 18% from the prior-year period. Adjusted EBITDA margin was 21.5% compared with the prior-year quarter’s 20.8%, courtesy of favorable price/cost spread and higher volumes.
Segment Performance
Food: Net sales jumped 16% year over year to $877 million. The segment reported strong volumes across all regions, attributed to favorable demand in food service and automated equipment solutions. The adjusted EBITDA was $204 million, up 20% from the last year’s quarter on volume growth and positive price/cost spread.
Protective: The segment reported net sales of $655 million during the quarter under review, up 12% from the prior-year quarter. The divestiture of Reflectix and currency fluctuation had an unfavorable impact of 1% each. The segment’s adjusted EBITDA increased 10% year over year to $126 million, aided by favorable price/cost spread, partially offset by higher operating costs.
Financial Updates
Cash flow from operating activities was $710 million in 2021 compared with the prior year’s $737 million. The company paid cash dividends of $116 million in 2021 and also repurchased shares for $403 million.
As of Dec 31, 2021, Sealed Air’s net debt was $3.1 billion, down from $3.2 billion as of Dec 31, 2020. As of the end of 2021, the company had $1.7 billion of liquidity available, which comprised $561 million in cash and $1.14 billion of undrawn, committed credit facilities.
2021 Results
Sealed Air’s adjusted earnings per share improved 11% year over year to $3.55 in 2021. The bottom line, however, missed the Zacks Consensus Estimate of $3.57. Including one-time items, the company delivered earnings per share of $3.55 in 2021 compared with earnings per share of $3.19 in 2020. Sales rose 13% year over year to $5,534 million and beat the Zacks Consensus Estimate of $5,498 million.
2022 Guidance
For 2022, Sealed Air expects net sales between $5.8 billion and $6 billion, indicating an increase of 5-8%. It factors in an unfavorable currency impact of approximately 2% and an unfavorable divestiture impact of approximately 1%.
The company anticipates adjusted EBITDA between $1.20 billion and $1.24 billion for the current year. The adjusted earnings per share are now forecast in the band of $3.95 to $4.15. Sealed Air projects free cash flow to be $510-$550 million for the ongoing year.
Share Price Performance
Image Source: Zacks Investment Research
In a year's time Sealed Air’s shares have gained 47.7%, compared with the industry’s growth of 8.7%.
Zacks Rank and Other Stocks to Consider
Sealed Air currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Industrial Products sector include Dover Corporation (DOV - Free Report) , Silgan Holdings Inc. (SLGN - Free Report) and Applied Industrial Technologies, Inc. (AIT - Free Report) , each carrying a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dover’s fourth-quarter 2021 adjusted EPS increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.
Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4%. DOV’s shares have rallied around 35% in a year.
Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.
Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 12%.
Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.
Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 23.7% in a year.