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Why Is Greif (GEF) Up 10.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for Greif (GEF - Free Report) . Shares have added about 10.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Greif due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Greif Earnings & Sales Surpass Estimates in Q1, Up Y/Y
Greif reported adjusted EPS of $1.28 in first-quarter fiscal 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 12.58% due to these changes.
VGM Scores
Currently, Greif has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Greif has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Greif (GEF) Up 10.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Greif (GEF - Free Report) . Shares have added about 10.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Greif due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Greif Earnings & Sales Surpass Estimates in Q1, Up Y/Y
Greif reported adjusted EPS of $1.28 in first-quarter fiscal 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 12.58% due to these changes.
VGM Scores
Currently, Greif has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Greif has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.