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Amcor (AMCR) Down 7.3% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Amcor (AMCR - Free Report) . Shares have lost about 7.3% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Amcor due for a breakout? 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 catalysts.

Amcor's Earnings Matches, Sales Beat Estimates in Q4

Amcor reported fourth-quarter fiscal 2022 adjusted earnings per share (EPS) of 24 cents, which came in line with the Zacks Consensus Estimate. The bottom line increased 4% year over.

Including special items, the company reported net earnings per share of 7.3 cents, down 55% from the prior-year quarter.

Total revenues increased 13% year over year to $3,909 million in the reported quarter and beat the Zacks Consensus Estimate of $3,815 million.

Cost and Margins

Cost of sales was up 15% year over year to $3,115 million. Gross profit increased 7% year over year to $794 million. The gross margin was 20.3% compared with the year-ago quarter’s 21.5%.

SG&A expenses were up 4% year over year to $342 million. Adjusted operating income was $505 million in the quarter, up 6% from the $476 million in the prior-year quarter. The adjusted operating margin was 12.9% compared with 13.7% in the prior-year quarter. Adjusted EBITDA in the quarter was $609 million compared with $572 million in the prior-year quarter.

Financial Updates

As of Jun 30, 2022, Amcor had $775 million of cash and cash equivalents compared with $850 million as of Jun 30, 2021. The company generated $1,526 million of cash in operating activities in fiscal 2022 compared with $1,461 million in fiscal 2021. Adjusted free cash flow was $1,066 million in fiscal 2022 compared with $1,099 million in the prior fiscal. As of Jun 30, 2022, Amcor’s net debt totaled $5.7 billion, up from $5.4 billion as of Jun 30, 2021.

In fiscal 2022, Amcor repurchased $600 million in shares, which reduced the total number of shares issued and outstanding by approximately 3%.

Fiscal 2023 Guidance

Amcor expects adjusted comparable constant currency EPS growth of approximately 3-8% in fiscal 2023, comprising approximately 5-10% growth from the underlying business performance and a benefit of approximately 2% from share repurchases. EPS is expected to be in the range of 80-84 cents. The company projects adjusted free cash flow of around $1 billion to $1.1 billion.

In fiscal 2023, AMCR estimates a negative impact of approximately 2% related to the scale down and the planned sale of the company's three plants in Russia and an unfavorable impact of approximately 2% related to a stronger US dollar.

 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Amcor has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Amcor has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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