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Amcor (AMCR) Q3 Earnings In Line With Estimates, View Lowered
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Amcor Plc (AMCR - Free Report) reported third-quarter fiscal 2023 (ended Mar 31, 2023) adjusted earnings per share of 18 cents, which came in line with the Zacks Consensus Estimate. The bottom line declined 14% from the prior-year quarter due to lower volumes.
Including special items, the company reported net earnings per share of 12 cents, down 33% from the prior-year quarter’s 18 cents.
Total revenues for the quarter were $3,667 million, which missed the Zacks Consensus Estimate of $3,705 million. Revenues were down 1% in comparison with the year-ago quarter. This included a negative currency impact of 2% and an unfavorable impact of 2% related to items affecting comparability. These were offset by a price increase of approximately 2%. Net sales on a comparable constant-currency basis were 1% higher than last year quarter, reflecting price/mix benefits of approximately 4%, partly offset by 3% lower volumes.
The cost of sales increased 0.6% year over year to $2,994 million. Gross profit dipped 8% year over year to $673 million. The gross margin was 18.4% for the quarter under review, reflecting a contraction from 19.7% reported in the prior-year quarter.
SG&A expenses decreased 3% year on year to $317 million from $326 million in the prior-year quarter. Adjusted operating income in the quarter under review was $382, million compared with $427 million in the prior-year quarter. The adjusted operating margin was 10.4%, compared with 11.5% in the prior-year quarter.
Segment Performances
The Flexibles segment’s net sales decreased 2% year over year to $2,787 million. Adjusted operating profit was $337 million, marking an 11% decline from the prior-year quarter’s figure.
The Rigid Packaging segment’s net sales were $880 million in the quarter under review, up 1% from the prior-year quarter. Adjusted operating profit for the segment declined 10% year over year to $69 million.
Financial Updates
As of the end of third-quarter fiscal 2023, Amcor had $564 million of cash and cash equivalents, compared with $775 million at fiscal 2022-end. The company generated $329 million in cash from operating activities in the first nine-month period of fiscal 2023, compared with $589 million in the prior-year comparable period.
AMCR reported an adjusted free cash outflow of $14 million in the first nine months of fiscal 2023 against $263 million in the comparable period of the last fiscal year. As of Mar 31, 2023, Amcor’s net debt totaled $6.4 billion.
Amcor repurchased 18 million shares for $200 million in the first nine months of fiscal 2023. AMCR has targeted total share repurchases of $500 million for fiscal 2023.
Fiscal 2023 Guidance
Amcor expects an adjusted comparable constant currency EPS decline of 1-4% for fiscal 2023. The company anticipates weak demand in the fourth quarter and a mid-single digit decline in overall volumes compared with last year. Adjusted EPS is expected to be in the band of 72-74 cents, revised downward from the prior stated range of 77-81 cents.
The guidance also factors in a 2% gain from share repurchases that will be partly offset by a negative impact of 4% related to higher interest expenses and tax. A stronger dollar will impact earnings by 4%. AMCR also anticipates a negative impact of 3% associated with the sale of its three plants in Russia.
The company projects an adjusted free cash flow of $800-$900 million.
Share Price Performance
Over the past year, Amcor’s shares have fallen 2.1%, compared with the industry’s 5.1% growth.
Worthington Industries has an average trailing four-quarter earnings surprise of 27.5%. The Zacks Consensus Estimate for WOR’s 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 has risen 0.8% in the past 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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Amcor (AMCR) Q3 Earnings In Line With Estimates, View Lowered
Amcor Plc (AMCR - Free Report) reported third-quarter fiscal 2023 (ended Mar 31, 2023) adjusted earnings per share of 18 cents, which came in line with the Zacks Consensus Estimate. The bottom line declined 14% from the prior-year quarter due to lower volumes.
Including special items, the company reported net earnings per share of 12 cents, down 33% from the prior-year quarter’s 18 cents.
Total revenues for the quarter were $3,667 million, which missed the Zacks Consensus Estimate of $3,705 million. Revenues were down 1% in comparison with the year-ago quarter. This included a negative currency impact of 2% and an unfavorable impact of 2% related to items affecting comparability. These were offset by a price increase of approximately 2%. Net sales on a comparable constant-currency basis were 1% higher than last year quarter, reflecting price/mix benefits of approximately 4%, partly offset by 3% lower volumes.
Amcor PLC Price, Consensus and EPS Surprise
Amcor PLC price-consensus-eps-surprise-chart | Amcor PLC Quote
Costs and Margins
The cost of sales increased 0.6% year over year to $2,994 million. Gross profit dipped 8% year over year to $673 million. The gross margin was 18.4% for the quarter under review, reflecting a contraction from 19.7% reported in the prior-year quarter.
SG&A expenses decreased 3% year on year to $317 million from $326 million in the prior-year quarter. Adjusted operating income in the quarter under review was $382, million compared with $427 million in the prior-year quarter. The adjusted operating margin was 10.4%, compared with 11.5% in the prior-year quarter.
Segment Performances
The Flexibles segment’s net sales decreased 2% year over year to $2,787 million. Adjusted operating profit was $337 million, marking an 11% decline from the prior-year quarter’s figure.
The Rigid Packaging segment’s net sales were $880 million in the quarter under review, up 1% from the prior-year quarter. Adjusted operating profit for the segment declined 10% year over year to $69 million.
Financial Updates
As of the end of third-quarter fiscal 2023, Amcor had $564 million of cash and cash equivalents, compared with $775 million at fiscal 2022-end. The company generated $329 million in cash from operating activities in the first nine-month period of fiscal 2023, compared with $589 million in the prior-year comparable period.
AMCR reported an adjusted free cash outflow of $14 million in the first nine months of fiscal 2023 against $263 million in the comparable period of the last fiscal year. As of Mar 31, 2023, Amcor’s net debt totaled $6.4 billion.
Amcor repurchased 18 million shares for $200 million in the first nine months of fiscal 2023. AMCR has targeted total share repurchases of $500 million for fiscal 2023.
Fiscal 2023 Guidance
Amcor expects an adjusted comparable constant currency EPS decline of 1-4% for fiscal 2023. The company anticipates weak demand in the fourth quarter and a mid-single digit decline in overall volumes compared with last year. Adjusted EPS is expected to be in the band of 72-74 cents, revised downward from the prior stated range of 77-81 cents.
The guidance also factors in a 2% gain from share repurchases that will be partly offset by a negative impact of 4% related to higher interest expenses and tax. A stronger dollar will impact earnings by 4%. AMCR also anticipates a negative impact of 3% associated with the sale of its three plants in Russia.
The company projects an adjusted free cash flow of $800-$900 million.
Share Price Performance
Over the past year, Amcor’s shares have fallen 2.1%, compared with the industry’s 5.1% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Amcor currently carries a Zacks Rank #4 (Sell).
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 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 has risen 0.8% in the past 60 days. OI has a trailing four-quarter average earnings surprise of 16.5%. Its shares gained 61.6% in the last year.