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Amcor Plc (AMCR - Free Report) reported second-quarter fiscal 2023 (ended Dec 31, 2023) adjusted earnings per share (EPS) of 16 cents, which surpassed the Zacks Consensus Estimate of 15 cents. The bottom line fell 15% from the year-ago quarter, mainly due to the downtrend in volumes reflecting customer destocking.
Including special items, the company reported net EPS of 9 cents compared with 31 cents in the year-ago quarter.
Total revenues fell 11% year over year to $3.25 billion in the reported quarter. The price/mix had benefits of around 1% on sales. The volume was down 9% from the year-ago quarter. A 2% favorable impact of movements in foreign exchange rates was offset by a 2% unfavorable impact of items affecting comparability and a 1% impact of pass-through of lower raw material costs. The top line missed the Zacks Consensus Estimate of $3.29 billion.
The cost of sales was down 12% year over year to $2.63 billion. Gross profit fell 6% year over year to $621 million. The gross margin was 19.1% compared with the year-ago quarter’s 18.2%.
SG&A expenses were $299 million, reflecting an increase of 0.3% year over year. Adjusted operating income was $352 million in the quarter, down 12% from $399 million in the year-ago quarter. The adjusted operating margin was 10.8% compared with 11% in the year-ago quarter. Adjusted EBITDA in the quarter was $454 million compared with $500 million in the prior-year quarter.
Segment Performances
Flexibles: Net sales decreased 12% year over year to $2.48 billion. Volume was down 10% year over year due to lower consumer demand and customer destocking. Our model projected net sales of $2,535 million based on an expectation of a year-over-year volume decline of 8% and a favorable price/mix of 1%.
The segment’s adjusted operating income fell 12% year over year to $312 million on lower volumes, partly offset by strong operating cost performance. We expected an adjusted operating income of $319 million.
Rigid Packaging: The segment reported net sales of $770 million in the reported quarter, down 7% from the year-ago quarter. Volume was down 12% year over year, which was offset by a favorable price/mix impact of 2%. We had projected net sales at $784.6 million, a year-over-year volume decline of 7.7% and a price/mix benefit of 1%.
Adjusted operating income was $51 million, down 10.5% year over year due to lower volumes, partly offset by the price/mix benefits and a favorable cost performance. Our prediction for the segment’s operating income was $59.5 million.
Financial Updates
As of Dec 31, 2023, Amcor had $430 million of cash and cash equivalents compared with $689 million as of Jun 30, 2023. The company generated $228 million of cash in operating activities in the first half of fiscal 2024 compared with $145 million in the year-ago comparable period.
As of Dec 31, 2023, Amcor’s net debt totaled $6.6 billion, up from $6.1 billion as of Jun 30, 2023.
Amcor returned $390 million to shareholders in the first half of fiscal 2024 through dividends and share repurchases. It has targeted total share repurchases of $70 million for fiscal 2024. Amcor’s board of directors raised its quarterly cash dividend of 12.5 cents per share from the previous payout of 12 cents per share.
FY24 Guidance
The company reaffirms its adjusted EPS at 67-71 cents for fiscal 2024. AMCR projects an adjusted free cash flow of $850-$950 million for fiscal 2024.
Price Performance
In the past year, Amcor’s shares have lost 18.5% compared with the industry’s 3.3% decline.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.11 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 48.6% in the past year.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 EPS is pegged at $4.19. The consensus estimate for 2024 earnings has moved 2% north in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 56.7% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 25.7% in a year.
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Amcor (AMCR) Q2 Earnings Beat Estimates, Revenues Dip Y/Y
Amcor Plc (AMCR - Free Report) reported second-quarter fiscal 2023 (ended Dec 31, 2023) adjusted earnings per share (EPS) of 16 cents, which surpassed the Zacks Consensus Estimate of 15 cents. The bottom line fell 15% from the year-ago quarter, mainly due to the downtrend in volumes reflecting customer destocking.
Including special items, the company reported net EPS of 9 cents compared with 31 cents in the year-ago quarter.
Total revenues fell 11% year over year to $3.25 billion in the reported quarter. The price/mix had benefits of around 1% on sales. The volume was down 9% from the year-ago quarter. A 2% favorable impact of movements in foreign exchange rates was offset by a 2% unfavorable impact of items affecting comparability and a 1% impact of pass-through of lower raw material costs. The top line missed the Zacks Consensus Estimate of $3.29 billion.
Amcor PLC Price, Consensus and EPS Surprise
Amcor PLC price-consensus-eps-surprise-chart | Amcor PLC Quote
Cost and Margins
The cost of sales was down 12% year over year to $2.63 billion. Gross profit fell 6% year over year to $621 million. The gross margin was 19.1% compared with the year-ago quarter’s 18.2%.
SG&A expenses were $299 million, reflecting an increase of 0.3% year over year. Adjusted operating income was $352 million in the quarter, down 12% from $399 million in the year-ago quarter. The adjusted operating margin was 10.8% compared with 11% in the year-ago quarter. Adjusted EBITDA in the quarter was $454 million compared with $500 million in the prior-year quarter.
Segment Performances
Flexibles: Net sales decreased 12% year over year to $2.48 billion. Volume was down 10% year over year due to lower consumer demand and customer destocking. Our model projected net sales of $2,535 million based on an expectation of a year-over-year volume decline of 8% and a favorable price/mix of 1%.
The segment’s adjusted operating income fell 12% year over year to $312 million on lower volumes, partly offset by strong operating cost performance. We expected an adjusted operating income of $319 million.
Rigid Packaging: The segment reported net sales of $770 million in the reported quarter, down 7% from the year-ago quarter. Volume was down 12% year over year, which was offset by a favorable price/mix impact of 2%. We had projected net sales at $784.6 million, a year-over-year volume decline of 7.7% and a price/mix benefit of 1%.
Adjusted operating income was $51 million, down 10.5% year over year due to lower volumes, partly offset by the price/mix benefits and a favorable cost performance. Our prediction for the segment’s operating income was $59.5 million.
Financial Updates
As of Dec 31, 2023, Amcor had $430 million of cash and cash equivalents compared with $689 million as of Jun 30, 2023. The company generated $228 million of cash in operating activities in the first half of fiscal 2024 compared with $145 million in the year-ago comparable period.
As of Dec 31, 2023, Amcor’s net debt totaled $6.6 billion, up from $6.1 billion as of Jun 30, 2023.
Amcor returned $390 million to shareholders in the first half of fiscal 2024 through dividends and share repurchases. It has targeted total share repurchases of $70 million for fiscal 2024. Amcor’s board of directors raised its quarterly cash dividend of 12.5 cents per share from the previous payout of 12 cents per share.
FY24 Guidance
The company reaffirms its adjusted EPS at 67-71 cents for fiscal 2024. AMCR projects an adjusted free cash flow of $850-$950 million for fiscal 2024.
Price Performance
In the past year, Amcor’s shares have lost 18.5% compared with the industry’s 3.3% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Amcor currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Cadre Holdings, Inc. (CDRE - Free Report) , AZZ Inc. (AZZ - Free Report) and Applied Industrial Technologies (AIT - Free Report) . CDRE currently sports a Zacks Rank #1 (Strong Buy), and AZZ and AIT carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.11 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 48.6% in the past year.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 EPS is pegged at $4.19. The consensus estimate for 2024 earnings has moved 2% north in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 56.7% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 25.7% in a year.