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Sealed Air (SEE) Q1 Earnings Top Estimates, Raises FY22 View
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Sealed Air Corporation (SEE - Free Report) reported first-quarter 2022 adjusted earnings per share of $1.12, which surpassed the Zacks Consensus Estimate of 92 cents. The bottom line figure improved 43.6% year over year on favorable price/cost spread and productivity improvements.
Including special items, the company delivered net earnings per share of $1.00 compared with the prior-year quarter’s 68 cents.
Total revenues were up 12% year over year to $1.42 million in the reported quarter. Sales in Americas surged 18% in the quarter followed by a 4% growth in EMEA. Meanwhile, sales in APAC were down 1%. Currency had an unfavorable impact of 3%, while price had a favorable impact of 16%. Volumes dipped 1%. The top line beat the Zacks Consensus Estimate of $1.39 billion.
Sealed Air Corporation Price, Consensus and EPS Surprise
Cost of sales climbed 9% year over year to $941 million. Gross profit was $477 million, which marked a 19% improvement from the year-ago quarter’s $401 million. Gross margin contracted to 33.6% from the prior-year quarter’s 31.7%.
The SG&A expenses increased 8.5% from the last-year quarter to $205 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was around $327 million in the quarter, which increased 22% from the prior-year period. Adjusted EBITDA margin was 23.1% compared with the prior-year quarter’s 21.2%, courtesy of favorable price/cost spread and productivity improvements, partially negated by labor and non-material inflation.
Segment Performance
Food: Net sales increased 15% year over year to $808 million. The segment reported a 1.5% increase in volumes across all regions, primarily aided by food service recovery. Adjusted EBITDA was $200 million, up 28% from the last year’s quarter on positive price/cost spread and productivity improvements. Higher labor and non-material cost inflation somewhat offset these gains.
Protective: The segment reported net sales of $610 million during the quarter under review, up 8% from the prior-year quarter. The divestiture of Reflectix and currency fluctuation had an unfavorable impact of 2% each. The segment’s adjusted EBITDA increased 16% year over year to $127 million, driven by favorable price/cost spread, partially offset by labor and non-material inflation.
Financial Updates
Cash flow from operating activities was $48 million in the first quarter of 2022 compared with the prior-year quarter’s $80 million. The company paid cash dividends of $31 million in the quarter under review and repurchased shares for $200 million.
As of Mar 31, 2022, Sealed Air’s net debt was $3.4 billion, up from $3.1 billion as of Dec 31, 2021. As of the end of the first quarter of 2022, the company had $1.4 billion of liquidity available, which comprised $278 million in cash and $1.14 billion of undrawn, committed credit facilities.
2022 Guidance
For 2022, Sealed Air expects net sales between $5.85 billion and $6.05 billion, compared with the prior expectation of $5.8 billion to $6.0 billion. It factors in an unfavorable currency impact of approximately 2% and an unfavorable divestiture impact of approximately 1%.
The company anticipates adjusted EBITDA between $1.22 billion to $1.25 billion, higher than the previously provided range of $1.20 billion to $1.24 billion. Adjusted earnings per share is now forecast in the band of $4.05 to $4.20 compared with the previous guidance 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 28.4%, compared with the industry’s growth of 0.6%.
Zacks Rank and Stocks to Consider
Sealed Air currently carries a Zacks Rank #3 (Hold).
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 has a trailing four-quarter earnings surprise of 17.4%, on average. Alcoa’s shares have soared 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.
Graphic Packaging has an estimated earnings growth rate of 100% for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 6%.
GPK pulled off a trailing four-quarter earnings surprise of 7.2%, on average. The company’s shares have appreciated 15% in a year’s time.
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Sealed Air (SEE) Q1 Earnings Top Estimates, Raises FY22 View
Sealed Air Corporation (SEE - Free Report) reported first-quarter 2022 adjusted earnings per share of $1.12, which surpassed the Zacks Consensus Estimate of 92 cents. The bottom line figure improved 43.6% year over year on favorable price/cost spread and productivity improvements.
Including special items, the company delivered net earnings per share of $1.00 compared with the prior-year quarter’s 68 cents.
Total revenues were up 12% year over year to $1.42 million in the reported quarter. Sales in Americas surged 18% in the quarter followed by a 4% growth in EMEA. Meanwhile, sales in APAC were down 1%. Currency had an unfavorable impact of 3%, while price had a favorable impact of 16%. Volumes dipped 1%. The top line beat the Zacks Consensus Estimate of $1.39 billion.
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 9% year over year to $941 million. Gross profit was $477 million, which marked a 19% improvement from the year-ago quarter’s $401 million. Gross margin contracted to 33.6% from the prior-year quarter’s 31.7%.
The SG&A expenses increased 8.5% from the last-year quarter to $205 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was around $327 million in the quarter, which increased 22% from the prior-year period. Adjusted EBITDA margin was 23.1% compared with the prior-year quarter’s 21.2%, courtesy of favorable price/cost spread and productivity improvements, partially negated by labor and non-material inflation.
Segment Performance
Food: Net sales increased 15% year over year to $808 million. The segment reported a 1.5% increase in volumes across all regions, primarily aided by food service recovery. Adjusted EBITDA was $200 million, up 28% from the last year’s quarter on positive price/cost spread and productivity improvements. Higher labor and non-material cost inflation somewhat offset these gains.
Protective: The segment reported net sales of $610 million during the quarter under review, up 8% from the prior-year quarter. The divestiture of Reflectix and currency fluctuation had an unfavorable impact of 2% each. The segment’s adjusted EBITDA increased 16% year over year to $127 million, driven by favorable price/cost spread, partially offset by labor and non-material inflation.
Financial Updates
Cash flow from operating activities was $48 million in the first quarter of 2022 compared with the prior-year quarter’s $80 million. The company paid cash dividends of $31 million in the quarter under review and repurchased shares for $200 million.
As of Mar 31, 2022, Sealed Air’s net debt was $3.4 billion, up from $3.1 billion as of Dec 31, 2021. As of the end of the first quarter of 2022, the company had $1.4 billion of liquidity available, which comprised $278 million in cash and $1.14 billion of undrawn, committed credit facilities.
2022 Guidance
For 2022, Sealed Air expects net sales between $5.85 billion and $6.05 billion, compared with the prior expectation of $5.8 billion to $6.0 billion. It factors in an unfavorable currency impact of approximately 2% and an unfavorable divestiture impact of approximately 1%.
The company anticipates adjusted EBITDA between $1.22 billion to $1.25 billion, higher than the previously provided range of $1.20 billion to $1.24 billion. Adjusted earnings per share is now forecast in the band of $4.05 to $4.20 compared with the previous guidance 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 28.4%, compared with the industry’s growth of 0.6%.
Zacks Rank and Stocks to Consider
Sealed Air currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Alcoa (AA - Free Report) , Packaging Corporation of America (PKG - Free Report) and Graphic Packaging Holding Company (GPK - 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 has a trailing four-quarter earnings surprise of 17.4%, on average. Alcoa’s shares have soared 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.
Graphic Packaging has an estimated earnings growth rate of 100% for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 6%.
GPK pulled off a trailing four-quarter earnings surprise of 7.2%, on average. The company’s shares have appreciated 15% in a year’s time.