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Berry Global (BERY) Q1 Earnings Beat, Revenues Down 14%
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Berry Global Group, Inc. (BERY - Free Report) reported first-quarter fiscal 2023 (ended Dec 31, 2022) adjusted earnings (excluding 45 cents from non-recurring items) of $1.30 per share, which surpassed the Zacks Consensus Estimate of $1.27. The bottom line increased 4% year over year due to lower costs.
Net sales of $3,060 million missed the Zacks Consensus Estimate of $3,303.2 million. The top line decreased 14.4% year over year due to a 6% decline in volumes, a 4% decrease in selling prices and a 3% impact from foreign currency headwind.
In the fiscal first quarter, Berry Global’s cost of goods sold decreased 16.3% to $2,542 million. Selling, general and administrative expenses were nearly flat year over year at $236 million. Berry Global reported an operating EBITDA of $443 million, down 3% year over year. Adjusted operating income in the quarter dipped 0.8% year over year to $244 million.
Berry Global Group, Inc. Price, Consensus and EPS Surprise
Consumer Packaging – International sales were $936 million, down 11.4% from the year-ago quarter’s level. The decline is primarily due to $65 million impact from unfavorable foreign currency movement and a 5% decrease in volumes. Operating income of $47 million fell 31.9% year over year. The segment accounted for 30.6% of the quarter’s net sales.
Consumer Packaging – North America’s sales were $764 million, down 10.3% year over year due to a 3% decline in volumes and $62 million impact from a decrease in selling prices. Operating income jumped 54.3% year over year to $71 million. The segment accounted for 25% of total net sales.
Revenues generated from Health, Hygiene & Specialties amounted to $663 million, down 18.9% year over year due to a decrease in selling prices, unfavorable foreign currency impact and volume declines. Operating income of $34 million declined 45.2% year over year. The segment accounted for 21.7% of total net sales in the reported quarter.
Revenues from Engineered Materials fell 17.7% year over year to $697 million due to a decrease in selling prices, a 9% decline in volumes and unfavorable foreign currency movements. Operating income of $58 million climbed 11.5% year over year. The segment accounted for 22.8% of the quarter’s net sales.
Balance Sheet and Cash Flow
At the end of first-quarter fiscal 2023, Berry Global had cash and cash equivalents of $717 million compared with $1,410 million at the end of fiscal 2022. Current and long-term debt totaled $9,272 million compared with $9,255 million at the end of fiscal 2022.
At the end of first-quarter fiscal 2023, Berry Global used net cash of $233 million in operating activities compared with $304 million used in the year-ago period. Capital expenditure totaled $211 million compared with $162 million in the year-ago quarter. Adjusted free cash flow at the end of the fiscal first quarter was negative $444 million compared with negative $466 million in the year-ago period.
In first-quarter fiscal 2023, BERY returned $211 million to shareholders through $178 million in share repurchases and $33 million in dividends. The company expects to repurchase shares worth at least $600 million in fiscal 2023.
Fiscal 2023 Outlook
Berry Global expects adjusted earnings of $7.30-$7.80 per share in fiscal 2023. The mid-point of the guided range — $7.55 — lies above the Zacks Consensus Estimate of $7.51.
BERY anticipates cash flow from operations of $1.4-$1.5 billion, while free cash flow is expected to be $800-$900 million in fiscal 2023. The company expects to reward shareholders with at least $700 million through dividends and share buybacks in fiscal 2023.
Zacks Rank & Key Picks
Berry Global currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the broader Industrial Products sector are as follows:
The Zacks Consensus Estimate for Allegion’s fourth-quarter earnings has been revised downward by 2.8% in the past 60 days. The stock has gained 17.6% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank of 2 (Buy). VMI delivered a trailing four-quarter earnings surprise of 12.5%, on average.
The Zacks Consensus Estimate for Valmont’s fourth-quarter earnings estimate has been revised upward by a penny in the past 60 days. The stock has rallied 19.4% in the past six months.
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Berry Global (BERY) Q1 Earnings Beat, Revenues Down 14%
Berry Global Group, Inc. (BERY - Free Report) reported first-quarter fiscal 2023 (ended Dec 31, 2022) adjusted earnings (excluding 45 cents from non-recurring items) of $1.30 per share, which surpassed the Zacks Consensus Estimate of $1.27. The bottom line increased 4% year over year due to lower costs.
Net sales of $3,060 million missed the Zacks Consensus Estimate of $3,303.2 million. The top line decreased 14.4% year over year due to a 6% decline in volumes, a 4% decrease in selling prices and a 3% impact from foreign currency headwind.
In the fiscal first quarter, Berry Global’s cost of goods sold decreased 16.3% to $2,542 million. Selling, general and administrative expenses were nearly flat year over year at $236 million. Berry Global reported an operating EBITDA of $443 million, down 3% year over year. Adjusted operating income in the quarter dipped 0.8% year over year to $244 million.
Berry Global Group, Inc. Price, Consensus and EPS Surprise
Berry Global Group, Inc. price-consensus-eps-surprise-chart | Berry Global Group, Inc. Quote
Segmental Discussion
Consumer Packaging – International sales were $936 million, down 11.4% from the year-ago quarter’s level. The decline is primarily due to $65 million impact from unfavorable foreign currency movement and a 5% decrease in volumes. Operating income of $47 million fell 31.9% year over year. The segment accounted for 30.6% of the quarter’s net sales.
Consumer Packaging – North America’s sales were $764 million, down 10.3% year over year due to a 3% decline in volumes and $62 million impact from a decrease in selling prices. Operating income jumped 54.3% year over year to $71 million. The segment accounted for 25% of total net sales.
Revenues generated from Health, Hygiene & Specialties amounted to $663 million, down 18.9% year over year due to a decrease in selling prices, unfavorable foreign currency impact and volume declines. Operating income of $34 million declined 45.2% year over year. The segment accounted for 21.7% of total net sales in the reported quarter.
Revenues from Engineered Materials fell 17.7% year over year to $697 million due to a decrease in selling prices, a 9% decline in volumes and unfavorable foreign currency movements. Operating income of $58 million climbed 11.5% year over year. The segment accounted for 22.8% of the quarter’s net sales.
Balance Sheet and Cash Flow
At the end of first-quarter fiscal 2023, Berry Global had cash and cash equivalents of $717 million compared with $1,410 million at the end of fiscal 2022. Current and long-term debt totaled $9,272 million compared with $9,255 million at the end of fiscal 2022.
At the end of first-quarter fiscal 2023, Berry Global used net cash of $233 million in operating activities compared with $304 million used in the year-ago period. Capital expenditure totaled $211 million compared with $162 million in the year-ago quarter. Adjusted free cash flow at the end of the fiscal first quarter was negative $444 million compared with negative $466 million in the year-ago period.
In first-quarter fiscal 2023, BERY returned $211 million to shareholders through $178 million in share repurchases and $33 million in dividends. The company expects to repurchase shares worth at least $600 million in fiscal 2023.
Fiscal 2023 Outlook
Berry Global expects adjusted earnings of $7.30-$7.80 per share in fiscal 2023. The mid-point of the guided range — $7.55 — lies above the Zacks Consensus Estimate of $7.51.
BERY anticipates cash flow from operations of $1.4-$1.5 billion, while free cash flow is expected to be $800-$900 million in fiscal 2023. The company expects to reward shareholders with at least $700 million through dividends and share buybacks in fiscal 2023.
Zacks Rank & Key Picks
Berry Global currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the broader Industrial Products sector are as follows:
Allegion plc (ALLE - Free Report) presently sports a Zacks Rank #1 (Strong Buy). ALLE pulled off a trailing four-quarter earnings surprise of 8.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
The Zacks Consensus Estimate for Allegion’s fourth-quarter earnings has been revised downward by 2.8% in the past 60 days. The stock has gained 17.6% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank of 2 (Buy). VMI delivered a trailing four-quarter earnings surprise of 12.5%, on average.
The Zacks Consensus Estimate for Valmont’s fourth-quarter earnings estimate has been revised upward by a penny in the past 60 days. The stock has rallied 19.4% in the past six months.