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Greif (GEF) Earnings Top, Sales Miss Estimates in Q3, Up Y/Y
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Greif, Inc. (GEF - Free Report) reported adjusted earnings per share (EPS) of $2.35 in third-quarter fiscal 2022 (ended Jul 31, 2022), surpassing the Zacks Consensus Estimate of $1.98. The bottom line increased 22% year on year.
Including one-time items, EPS was $2.36 in the quarter compared with $1.89 in the prior-year quarter.
Operational Update
Sales were up 9% year over year to $1,622 million. The top line missed the Zacks Consensus Estimate of $1,631 million.
The cost of sales was up 9% year over year to $1,275 million. Gross profit amounted to $347 million, up 9% from the prior-year quarter’s levels. The gross margin came in at 21.3%, remaining unchanged year over year.
Selling, general and administrative (SG&A) expenses came in at $142 million compared with the prior-year quarter’s $143 million. Adjusted EBITDA increased 6% year over year to $251 million in the fiscal third quarter.
Segmental Performance
Sales in the Global Industrial Packaging segment came in at $907 million compared with the prior-year quarter’s $908 million. The segment’s adjusted EBITDA amounted to $117 million compared with the year-ago quarter’s $146 million.
The Paper Packaging segment sales rose 23% year over year to $710 million in the fiscal third quarter. The segment’s adjusted EBITDA moved up to $132 million from the prior-year quarter’s $90 million.
The Land Management segment’s sales totaled $5.2 million in the reported quarter compared with $4.2 million in the year-ago quarter. Adjusted EBITDA was $2.1 million compared with the year-earlier quarter’s $1.7 million.
Financial Position
Greif reported cash and cash equivalents of $128 million at the end of third-quarter fiscal 2022 compared with $124.6 at the end of fiscal 2021. Cash flow from operating activities totaled $209 million in the quarter under review compared with $95 million in the prior-year quarter.
Long-term debt amounted to $1,986 million as of Jul 31, 2022 compared with $2,055 million as of Oct 31, 2021.
On Aug 30, Greif’s board announced a quarterly cash dividend of 50 cents per share of Class A Common Stock and 75 cents per share of Class B Common Stock. The dividend will be paid out on Oct 1 to shareholders of record at the close of business as of Sep 16, 2022.
Outlook
Given strong end-market demand, Greif expects fiscal 2022 adjusted EPS between $7.90 and $8.10. Adjusted free cash flow is anticipated to be between $415 million and $445 million.
Price Performance
Greif’s shares have gained 18.3% in the past six months compared with the industry’s growth of 0.3%.
Applied Industrial has an estimated earnings growth rate of 10.9% for fiscal 2023. In the past 60 days, the Zacks Consensus Estimate for fiscal 2023 earnings has been revised upward by 6%.
Applied Industrial pulled off a trailing four-quarter earnings surprise of 22.8%, on average. AIT’s shares have gained 4.1% in the past six months.
Silgan has an estimated earnings growth rate of 17.3% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 1%.
Silgan pulled off a trailing four-quarter earnings surprise of 5.3%, on average. SLGN’s shares have gained 10.6% in the past six months.
Sonoco has an expected earnings growth rate of 78.3% for 2022. The Zacks Consensus Estimate for the current year’s earnings moved up 18% in the past 60 days.
Sonoco has a trailing four-quarter earnings surprise of 4.06%, on average. SON’s shares have moved up 10.4% in the past six months.
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Greif (GEF) Earnings Top, Sales Miss Estimates in Q3, Up Y/Y
Greif, Inc. (GEF - Free Report) reported adjusted earnings per share (EPS) of $2.35 in third-quarter fiscal 2022 (ended Jul 31, 2022), surpassing the Zacks Consensus Estimate of $1.98. The bottom line increased 22% year on year.
Including one-time items, EPS was $2.36 in the quarter compared with $1.89 in the prior-year quarter.
Operational Update
Sales were up 9% year over year to $1,622 million. The top line missed the Zacks Consensus Estimate of $1,631 million.
The cost of sales was up 9% year over year to $1,275 million. Gross profit amounted to $347 million, up 9% from the prior-year quarter’s levels. The gross margin came in at 21.3%, remaining unchanged year over year.
Selling, general and administrative (SG&A) expenses came in at $142 million compared with the prior-year quarter’s $143 million. Adjusted EBITDA increased 6% year over year to $251 million in the fiscal third quarter.
Segmental Performance
Sales in the Global Industrial Packaging segment came in at $907 million compared with the prior-year quarter’s $908 million. The segment’s adjusted EBITDA amounted to $117 million compared with the year-ago quarter’s $146 million.
The Paper Packaging segment sales rose 23% year over year to $710 million in the fiscal third quarter. The segment’s adjusted EBITDA moved up to $132 million from the prior-year quarter’s $90 million.
The Land Management segment’s sales totaled $5.2 million in the reported quarter compared with $4.2 million in the year-ago quarter. Adjusted EBITDA was $2.1 million compared with the year-earlier quarter’s $1.7 million.
Financial Position
Greif reported cash and cash equivalents of $128 million at the end of third-quarter fiscal 2022 compared with $124.6 at the end of fiscal 2021. Cash flow from operating activities totaled $209 million in the quarter under review compared with $95 million in the prior-year quarter.
Long-term debt amounted to $1,986 million as of Jul 31, 2022 compared with $2,055 million as of Oct 31, 2021.
On Aug 30, Greif’s board announced a quarterly cash dividend of 50 cents per share of Class A Common Stock and 75 cents per share of Class B Common Stock. The dividend will be paid out on Oct 1 to shareholders of record at the close of business as of Sep 16, 2022.
Outlook
Given strong end-market demand, Greif expects fiscal 2022 adjusted EPS between $7.90 and $8.10. Adjusted free cash flow is anticipated to be between $415 million and $445 million.
Price Performance
Greif’s shares have gained 18.3% in the past six months compared with the industry’s growth of 0.3%.
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Zacks Rank & Other Stocks to Consider
Greif currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the Industrial Products sector are Applied Industrial Technologies, Inc. (AIT - Free Report) , Silgan Holdings Company (SLGN - Free Report) and Sonoco Products Company (SON - Free Report) . While AIT sports a Zacks Rank #1 (Strong Buy), SLGN and SON carry a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial has an estimated earnings growth rate of 10.9% for fiscal 2023. In the past 60 days, the Zacks Consensus Estimate for fiscal 2023 earnings has been revised upward by 6%.
Applied Industrial pulled off a trailing four-quarter earnings surprise of 22.8%, on average. AIT’s shares have gained 4.1% in the past six months.
Silgan has an estimated earnings growth rate of 17.3% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 1%.
Silgan pulled off a trailing four-quarter earnings surprise of 5.3%, on average. SLGN’s shares have gained 10.6% in the past six months.
Sonoco has an expected earnings growth rate of 78.3% for 2022. The Zacks Consensus Estimate for the current year’s earnings moved up 18% in the past 60 days.
Sonoco has a trailing four-quarter earnings surprise of 4.06%, on average. SON’s shares have moved up 10.4% in the past six months.