It has been about a month since the last earnings report for Amcor (
AMCR Quick Quote AMCR - Free Report) . Shares have added about 0.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Amcor due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Amcor Q3 Earnings Beat Estimates, Raises FY22 View
Amcor reported third-quarter fiscal 2022 adjusted EPS of 21 cents, which beat the Zacks Consensus Estimate of 20 cents. The bottom line improved 15% year over year from 18 cents reported in the prior-year quarter.
Including special items, the company reported net EPS of 18 cents, up 3% from the prior-year quarter.
Total revenues improved 16% year over year to $3,708 million in the reported quarter and surpassed the Zacks Consensus Estimate of $3,560 million.
Cost and Margins
Cost of sales increased 18% year over year to $2,977 million. Gross profit rose 7% year over year to $731 million. Gross margin was 19.7%, reflecting a contraction of 160 basis points from the prior-year quarter.
SG&A expenses inched up 0.5% year over year to $326 million. Adjusted operating income was $427 million in the quarter, up 6% from the $402 million in the prior-year quarter. Adjusted operating margin was 11.5% compared with 12.5% in the prior-year quarter. Adjusted EBITDA in the quarter was $531 million compared with $507 million in the prior-year quarter.
As of Mar 30, 2022, Amcor had $1,077 million of cash and cash equivalents compared with $850 million as of Jun 30, 2021. The company generated $589 million of cash in operating activities in the first nine-month period in fiscal 2022 compared with $617 million in the prior-year period. Adjusted free cash flow was $263 million in the first nine-month period in fiscal 2022 compared with $360 million in the last-year period. As of Mar 31, 2022, Amcor’s net debt totaled $6.17 billion, up from $5.4 billion as of Jun 30, 2021.
Amcor repurchased 36 million shares for $423 million in nine months ended Mar 31, 2022. It plans to spend $600 million on share repurchases in fiscal 2022.
Fiscal 2022 Guidance Raised
Amcor expects adjusted constant currency EPS growth of approximately 9.5% to 11% in fiscal 2022, higher than the 7-11% projected earlier. EPS is expected to range between 79.5 cents and 81.0 cents. This is higher than the earlier provided guidance of 79 cents to 81 cents per share. The company projects adjusted free cash flow of around $1.1 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
Currently, Amcor has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Amcor has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.