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Silgan Holdings Inc. (SLGN - Free Report) reported first-quarter 2022 adjusted earnings of a record 78 cents per share, beating the Zacks Consensus Estimate of 77 cents per share. Quarterly earnings also came within the guidance of 70-80 cents. The bottom line increased 4% year over year from the last year’s earnings per share of 75 cents.
Including one-time items, earnings came in at 76 cents per share compared with 66 cents reported in the prior-year quarter.
Total revenues increased 16.5% year over year to $1,442 million, surpassing the Zacks Consensus Estimate of $1,398 million. The upside was driven by pass-through of higher raw material and other manufacturing costs, improved productivity and operating efficiencies.
Cost and Margins
During first-quarter 2022, the cost of goods sold increased 19% year over year to $1,208 million. The gross profit increased 5% to $234 million. The gross margin came in at 16.2% compared with the prior-year quarter’s 17.8%.
Selling, general and administrative expenses were $100 million during the reported quarter compared with the year-ago quarter’s $97 million. The company reported an operating income of $143.4 million in the quarter compared with $126.6 million in the prior-year quarter. The operating margin was 9.9% in the reported quarter compared with the prior-year quarter’s 10.2%.
Silgan Holdings Inc. Price, Consensus and EPS Surprise
Revenues in the Dispensing and Specialty Closures segment were up 17% year over year to $598 million. The segment’s adjusted operating income came in at $87 million compared with $71 million in the comparable period last year. The segment benefited from continued strong demand from the fragrance and beauty markets, a stellar performance from prior-year acquisitions and lower resin costs.
The Metal Containers segment’s revenues increased 17% year over year to $651 million. Adjusted operating income in the segment amounted to $39.3 million compared with the prior-year quarter’s $50.6 million. The segment’s volumes have stabilized well above pre-pandemic levels.
In the Custom Containers segment, revenues came in at $193 million compared with the year-ago quarter’s $175 million. The segment reported an adjusted operating profit of $25 million, flat year over year. The segment benefited from strong operating performance and lower resin costs.
Financial Updates
The company had cash and cash equivalents of $259.6 million at the end of first-quarter 2022 compared with $190.1 million at the end of the prior-year quarter. The company utilized around $267 million cash in operating activities in the first quarter compared with $172 million in the year-ago quarter.
2022 Outlook
Silgan now expects adjusted EPS for 2022 to be between $3.90 and $4.05, suggesting year-over-year growth of 17% at the mid-point. The guidance is up from the prior estimate of $3.80 to $4.00. The upbeat guidance reflects strong contribution from recent acquisitions, pass-through of raw material and other cost inflation, improved supply chain, labor availability and ongoing operating efficiencies across each segment.
For second-quarter 2022, Silgan anticipates adjusted EPS between 90 cents and $1.00, indicating year-over-year growth of 12% at the mid-point.
Price Performance
Silgan’s shares have gained 6.4% in the past year against the industry’s loss of 6.8%.
Alcoa has a projected earnings growth rate of 107% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 76% in the past 60 days.
Alcoa delivered a trailing four-quarter earnings surprise of 17.4% on average. Alcoa’s shares have surged 81% in the past year.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have gained 9.7% in the past year.
Greif has an estimated earnings growth rate of 16% for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4.2%.
GEF pulled off a trailing four-quarter earnings surprise of 14.7%, on average. The company’s shares have appreciated 5% in a year’s time.
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Silgan (SLGN) Q1 Earnings & Sales Top Estimates, Hikes '22 View
Silgan Holdings Inc. (SLGN - Free Report) reported first-quarter 2022 adjusted earnings of a record 78 cents per share, beating the Zacks Consensus Estimate of 77 cents per share. Quarterly earnings also came within the guidance of 70-80 cents. The bottom line increased 4% year over year from the last year’s earnings per share of 75 cents.
Including one-time items, earnings came in at 76 cents per share compared with 66 cents reported in the prior-year quarter.
Total revenues increased 16.5% year over year to $1,442 million, surpassing the Zacks Consensus Estimate of $1,398 million. The upside was driven by pass-through of higher raw material and other manufacturing costs, improved productivity and operating efficiencies.
Cost and Margins
During first-quarter 2022, the cost of goods sold increased 19% year over year to $1,208 million. The gross profit increased 5% to $234 million. The gross margin came in at 16.2% compared with the prior-year quarter’s 17.8%.
Selling, general and administrative expenses were $100 million during the reported quarter compared with the year-ago quarter’s $97 million. The company reported an operating income of $143.4 million in the quarter compared with $126.6 million in the prior-year quarter. The operating margin was 9.9% in the reported quarter compared with the prior-year quarter’s 10.2%.
Silgan Holdings Inc. Price, Consensus and EPS Surprise
Silgan Holdings Inc. price-consensus-eps-surprise-chart | Silgan Holdings Inc. Quote
Segment Performance
Revenues in the Dispensing and Specialty Closures segment were up 17% year over year to $598 million. The segment’s adjusted operating income came in at $87 million compared with $71 million in the comparable period last year. The segment benefited from continued strong demand from the fragrance and beauty markets, a stellar performance from prior-year acquisitions and lower resin costs.
The Metal Containers segment’s revenues increased 17% year over year to $651 million. Adjusted operating income in the segment amounted to $39.3 million compared with the prior-year quarter’s $50.6 million. The segment’s volumes have stabilized well above pre-pandemic levels.
In the Custom Containers segment, revenues came in at $193 million compared with the year-ago quarter’s $175 million. The segment reported an adjusted operating profit of $25 million, flat year over year. The segment benefited from strong operating performance and lower resin costs.
Financial Updates
The company had cash and cash equivalents of $259.6 million at the end of first-quarter 2022 compared with $190.1 million at the end of the prior-year quarter. The company utilized around $267 million cash in operating activities in the first quarter compared with $172 million in the year-ago quarter.
2022 Outlook
Silgan now expects adjusted EPS for 2022 to be between $3.90 and $4.05, suggesting year-over-year growth of 17% at the mid-point. The guidance is up from the prior estimate of $3.80 to $4.00. The upbeat guidance reflects strong contribution from recent acquisitions, pass-through of raw material and other cost inflation, improved supply chain, labor availability and ongoing operating efficiencies across each segment.
For second-quarter 2022, Silgan anticipates adjusted EPS between 90 cents and $1.00, indicating year-over-year growth of 12% at the mid-point.
Price Performance
Silgan’s shares have gained 6.4% in the past year against the industry’s loss of 6.8%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Silgan currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Industrial Products sector are Alcoa (AA - Free Report) , Packaging Corporation of America (PKG - Free Report) and Greif Inc. (GEF - Free Report) . While AA and PKG flaunt a Zacks Rank #1 (Strong Buy), GEF carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alcoa has a projected earnings growth rate of 107% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 76% in the past 60 days.
Alcoa delivered a trailing four-quarter earnings surprise of 17.4% on average. Alcoa’s shares have surged 81% in the past year.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have gained 9.7% in the past year.
Greif has an estimated earnings growth rate of 16% for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4.2%.
GEF pulled off a trailing four-quarter earnings surprise of 14.7%, on average. The company’s shares have appreciated 5% in a year’s time.