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Sealed Air (SEE) Q1 Earnings & Revenues Miss Estimates, Down Y/Y
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Sealed Air Corporation (SEE - Free Report) reported first-quarter 2023 adjusted earnings per share of 74 cents, which missed the Zacks Consensus Estimate of 77 cents per share. The bottom line figure slumped 34% year over year mainly due to lower volumes.
Including special items, the company delivered net earnings per share of 44 cents, compared with the prior-year quarter’s $1.00.
Total revenues were $1.35 billion in the reported quarter, down 5% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $1.36 billion. Price had a favorable impact of 3% while volumes were down 9.3%.
Sealed Air Corporation Price, Consensus and EPS Surprise
The cost of sales inched up 0.3% year over year to $944 million. The gross profit was $405 million, which marked a 15% decline from the year-ago quarter. The gross margin contracted to 30% from the prior-year quarter’s 33.6%. Selling, general and administrative expenses rose 8% from the last-year quarter to $222 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was around $267 million in the quarter, which declined 18% from the prior-year period. Adjusted EBITDA margin was 19.8%, compared with the prior-year quarter’s 23.1% due to lower volume and unfavorable foreign currency impact, somewhat offset by the Liquibox acquisition.
Segment Performance
Food: Net sales rose 6% year over year to $853 million. Volumes were down 3%, owing to food retail market declines and the impact from prior supply disruptions. Pricing actions had a favorable impact of 4%. Currency fluctuations had an unfavorable impact of 3%.
Adjusted EBITDA was $195 million, down 3% from the last year’s quarter, due to lower volumes and unfavorable currency impact. Contribution from the Liquibox acquisition somewhat offset these negatives.
Protective: The segment reported net sales of $496 million during the quarter under review, down 19% from the prior-year quarter. Currency impacted sales by 2%, pricing had a positive impact of 2%, while volumes slumped 18% owing to recessionary pressures in the industrial and fulfillment markets and destocking through the value chain. The segment’s adjusted EBITDA plunged 37% year over year to $80 million mainly due to lower volumes.
Financial Updates
The cash flow from operating activities was around $52 million in the first quarter of 2023, compared with $48 million in the first quarter of 2022. The company paid cash dividends of $31 million in the quarter under review and repurchased 1.5 million shares for $80 million.
As of Mar 31, 2023, Sealed Air’s net debt was $4.8 billion, up from $3.7 billion as of Dec 31, 2022. As of the end of the first quarter of 2023, the company had $1.25 billion of liquidity available, which comprised $303 million in cash and $949 million of undrawn, committed credit facilities.
2023 Guidance
For 2023, Sealed Air expects net sales between $5.85 billion and $6.10 billion. The guidance range indicates an increase of 4% to 8%, which includes the favorable Liquibox acquisition impact of approximately 6% and an unfavorable currency impact of approximately 1%. SEE anticipates adjusted EBITDA in the range of $1.25 billion to $1.30 billion. Adjusted earnings per share are forecasted in the band of $3.50 to $3.80.
Share Price Performance
In a year's time, Sealed Air’s shares have fallen 26.9% compared with the industry’s 5.6% decline.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Sealed Air currently carries a Zacks Rank #3 (Hold).
Worthington Industries has an average trailing four-quarter earnings surprise of 27.5%. The Zacks Consensus Estimate for WOR’s fiscal 2023 earnings is pegged at $4.93 per share. The consensus estimate for 2023 earnings has moved north by 17.7% in the past 60 days. Its shares gained 17.3% in the last year.
Manitowoc has an average trailing four-quarter earnings surprise of 38.8%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at 85 cents per share. The consensus estimate for 2023 earnings has moved 63.5% north in the past 60 days. MTW’s shares gained 20% in the last year.
The Zacks Consensus Estimate for OI Glass’ 2023 earnings per share is pegged at $2.59. The consensus estimate for 2023 earnings rose 0.8% in the last 60 days. OI has a trailing four-quarter average earnings surprise of 16.5%. Its shares gained 61.6% in the last year.
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Sealed Air (SEE) Q1 Earnings & Revenues Miss Estimates, Down Y/Y
Sealed Air Corporation (SEE - Free Report) reported first-quarter 2023 adjusted earnings per share of 74 cents, which missed the Zacks Consensus Estimate of 77 cents per share. The bottom line figure slumped 34% year over year mainly due to lower volumes.
Including special items, the company delivered net earnings per share of 44 cents, compared with the prior-year quarter’s $1.00.
Total revenues were $1.35 billion in the reported quarter, down 5% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $1.36 billion. Price had a favorable impact of 3% while volumes were down 9.3%.
Sealed Air Corporation Price, Consensus and EPS Surprise
Sealed Air Corporation price-consensus-eps-surprise-chart | Sealed Air Corporation Quote
Cost and Margins
The cost of sales inched up 0.3% year over year to $944 million. The gross profit was $405 million, which marked a 15% decline from the year-ago quarter. The gross margin contracted to 30% from the prior-year quarter’s 33.6%. Selling, general and administrative expenses rose 8% from the last-year quarter to $222 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was around $267 million in the quarter, which declined 18% from the prior-year period. Adjusted EBITDA margin was 19.8%, compared with the prior-year quarter’s 23.1% due to lower volume and unfavorable foreign currency impact, somewhat offset by the Liquibox acquisition.
Segment Performance
Food: Net sales rose 6% year over year to $853 million. Volumes were down 3%, owing to food retail market declines and the impact from prior supply disruptions. Pricing actions had a favorable impact of 4%. Currency fluctuations had an unfavorable impact of 3%.
Adjusted EBITDA was $195 million, down 3% from the last year’s quarter, due to lower volumes and unfavorable currency impact. Contribution from the Liquibox acquisition somewhat offset these negatives.
Protective: The segment reported net sales of $496 million during the quarter under review, down 19% from the prior-year quarter. Currency impacted sales by 2%, pricing had a positive impact of 2%, while volumes slumped 18% owing to recessionary pressures in the industrial and fulfillment markets and destocking through the value chain. The segment’s adjusted EBITDA plunged 37% year over year to $80 million mainly due to lower volumes.
Financial Updates
The cash flow from operating activities was around $52 million in the first quarter of 2023, compared with $48 million in the first quarter of 2022. The company paid cash dividends of $31 million in the quarter under review and repurchased 1.5 million shares for $80 million.
As of Mar 31, 2023, Sealed Air’s net debt was $4.8 billion, up from $3.7 billion as of Dec 31, 2022. As of the end of the first quarter of 2023, the company had $1.25 billion of liquidity available, which comprised $303 million in cash and $949 million of undrawn, committed credit facilities.
2023 Guidance
For 2023, Sealed Air expects net sales between $5.85 billion and $6.10 billion. The guidance range indicates an increase of 4% to 8%, which includes the favorable Liquibox acquisition impact of approximately 6% and an unfavorable currency impact of approximately 1%. SEE anticipates adjusted EBITDA in the range of $1.25 billion to $1.30 billion. Adjusted earnings per share are forecasted in the band of $3.50 to $3.80.
Share Price Performance
In a year's time, Sealed Air’s shares have fallen 26.9% compared with the industry’s 5.6% decline.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Sealed Air currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Worthington Industries, Inc. (WOR - Free Report) , The Manitowoc Company, Inc. (MTW - Free Report) and OI Glass Inc. (OI - Free Report) . WOR and MTW sport a Zacks Rank #1 (Strong Buy) at present, and OI has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Worthington Industries has an average trailing four-quarter earnings surprise of 27.5%. The Zacks Consensus Estimate for WOR’s fiscal 2023 earnings is pegged at $4.93 per share. The consensus estimate for 2023 earnings has moved north by 17.7% in the past 60 days. Its shares gained 17.3% in the last year.
Manitowoc has an average trailing four-quarter earnings surprise of 38.8%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at 85 cents per share. The consensus estimate for 2023 earnings has moved 63.5% north in the past 60 days. MTW’s shares gained 20% in the last year.
The Zacks Consensus Estimate for OI Glass’ 2023 earnings per share is pegged at $2.59. The consensus estimate for 2023 earnings rose 0.8% in the last 60 days. OI has a trailing four-quarter average earnings surprise of 16.5%. Its shares gained 61.6% in the last year.