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Greif (GEF) Earnings & Sales Surpass Estimates in Q1, Up Y/Y
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Greif, Inc. (GEF - Free Report) reported adjusted earnings per share (EPS) of $1.28 in first-quarter fiscal 2022 (ended Jan 31, 2022), which surpassed the Zacks Consensus Estimate of $1.20. The bottom line increased 109.8% year on year.
Including one-time items, EPS was 18 cents in the quarter compared with 40 cents in the prior-year quarter.
Operational Update
Sales surged 36% year over year to $1,564 million. The top line beat the Zacks Consensus Estimate of $1,495 million.
Cost of sales was up 36% year over year to $1,275 million. Gross profit amounted to $289.7 million, up 37% from the prior-year quarter’s levels. Gross margin came in at 18.5%, flat year over year.
Selling, general and administrative (SG&A) expenses rose 12.8% year over year to $152 million. Adjusted EBITDA increased 42% year over year to $197 million in the fiscal first quarter.
Sales in the Global Industrial Packaging segment increased 44% year over year to $949.1 million. The segment’s adjusted EBITDA amounted to $114 million compared with the year-ago quarter’s $79.5 million.
The Paper Packaging segment sales rose 27% year over year to $610 million in the fiscal first quarter. The segment’s adjusted EBITDA moved up to $81 million from the prior-year quarter’s $56 million.
The Land Management segment’s sales totaled $5.2 million in the reported quarter compared with $6.3 million in the year-ago quarter. Adjusted EBITDA was $2 million, down from the year-earlier quarter’s $3 million.
Financial Position
Greif reported cash and cash equivalents of $119.7 million at the end of first-quarter fiscal 2022 compared with $124.6 at the end of fiscal 2021. Cash flow from operating activities totaled $22 million in the quarter under review compared with $12 million in the prior-year quarter.
Long-term debt amounted to $2,139 million as of Jan 31, 2022, compared with $2,055 million as of Oct 31, 2021.
On Mar 1, Greif’s board announced a quarterly cash dividend of 46 cents per share of Class A Common Stock and 69 cents per share of Class B Common Stock. The dividend will be paid out on Apr 1 to shareholders of record at the close of business as of Mar 17, 2022.
Outlook
Given strong end-market demand, Greif expects fiscal 2022 adjusted EPS between $6.30 and $6.90. Adjusted free cash flow is anticipated between $380 million and $440 million.
Business Update
Greif entered into an agreement to divest its 50% ownership in the Flexible Products & Services joint venture to Gulf Refined Packaging for cash proceeds of $123 million. The company expects to utilize the fund for the repayment of debt. The deal is likely to be closed by Mar 31, 2022.
Price Performance
Greif’s shares have appreciated 10.6% in the past year compared with the industry’s growth of 8.8%.
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 20.2% in a year.
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 5%. DOV’s shares have rallied around 32.1% 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 11.7%.
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Greif (GEF) Earnings & Sales Surpass Estimates in Q1, Up Y/Y
Greif, Inc. (GEF - Free Report) reported adjusted earnings per share (EPS) of $1.28 in first-quarter fiscal 2022 (ended Jan 31, 2022), which surpassed the Zacks Consensus Estimate of $1.20. The bottom line increased 109.8% year on year.
Including one-time items, EPS was 18 cents in the quarter compared with 40 cents in the prior-year quarter.
Operational Update
Sales surged 36% year over year to $1,564 million. The top line beat the Zacks Consensus Estimate of $1,495 million.
Cost of sales was up 36% year over year to $1,275 million. Gross profit amounted to $289.7 million, up 37% from the prior-year quarter’s levels. Gross margin came in at 18.5%, flat year over year.
Selling, general and administrative (SG&A) expenses rose 12.8% year over year to $152 million. Adjusted EBITDA increased 42% year over year to $197 million in the fiscal first quarter.
Greif, Inc. Price, Consensus and EPS Surprise
Greif, Inc. price-consensus-eps-surprise-chart | Greif, Inc. Quote
Segmental Performance
Sales in the Global Industrial Packaging segment increased 44% year over year to $949.1 million. The segment’s adjusted EBITDA amounted to $114 million compared with the year-ago quarter’s $79.5 million.
The Paper Packaging segment sales rose 27% year over year to $610 million in the fiscal first quarter. The segment’s adjusted EBITDA moved up to $81 million from the prior-year quarter’s $56 million.
The Land Management segment’s sales totaled $5.2 million in the reported quarter compared with $6.3 million in the year-ago quarter. Adjusted EBITDA was $2 million, down from the year-earlier quarter’s $3 million.
Financial Position
Greif reported cash and cash equivalents of $119.7 million at the end of first-quarter fiscal 2022 compared with $124.6 at the end of fiscal 2021. Cash flow from operating activities totaled $22 million in the quarter under review compared with $12 million in the prior-year quarter.
Long-term debt amounted to $2,139 million as of Jan 31, 2022, compared with $2,055 million as of Oct 31, 2021.
On Mar 1, Greif’s board announced a quarterly cash dividend of 46 cents per share of Class A Common Stock and 69 cents per share of Class B Common Stock. The dividend will be paid out on Apr 1 to shareholders of record at the close of business as of Mar 17, 2022.
Outlook
Given strong end-market demand, Greif expects fiscal 2022 adjusted EPS between $6.30 and $6.90. Adjusted free cash flow is anticipated between $380 million and $440 million.
Business Update
Greif entered into an agreement to divest its 50% ownership in the Flexible Products & Services joint venture to Gulf Refined Packaging for cash proceeds of $123 million. The company expects to utilize the fund for the repayment of debt. The deal is likely to be closed by Mar 31, 2022.
Price Performance
Greif’s shares have appreciated 10.6% in the past year compared with the industry’s growth of 8.8%.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Greif currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector include Applied Industrial Technologies, Inc. (AIT - Free Report) , Dover Corporation (DOV - Free Report) and Silgan Holdings Inc. (SLGN - Free Report) . While AIT sports a Zacks Rank #1 (Strong Buy), DOV and SLGN carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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 20.2% in a year.
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 5%. DOV’s shares have rallied around 32.1% 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 11.7%.