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Berry Global (BERY) Q1 Earnings & Revenues Miss Estimates
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Berry Global Group, Inc. (BERY - Free Report) reported first-quarter fiscal 2024 (ended December 2023) adjusted earnings of $1.22 per share, which missed the Zacks Consensus Estimate of $1.29. The bottom line decreased 6% year over year.
Net sales of $2.85 billion missed the Zacks Consensus Estimate of $2.99 billion. The top line decreased 7% year over year due to a 3% dip in volumes and lower selling prices, which declined $189 million due to the pass-through of lower resin costs. Reduced demand in the consumer and industrial markets led to the volume decline.
In the fiscal first quarter, Berry Global’s cost of goods sold decreased 6.4% to $2.38 billion. Selling, general and administrative expenses were flat year over year at $235 million. The company reported an operating EBITDA of $431 million, down 2.7% year over year. Adjusted operating income in the quarter decreased 11.1% year over year to $217 million.
Berry Global Group, Inc. Price, Consensus and EPS Surprise
Concurrently, Berry Global announced its plan to go for a tax-free spin-off and merge the majority of its Health, Hygiene and Specialties segment (comprising the global nonwovens and films business) with Glatfelter Corporation (GLT - Free Report) . In relation to this announcement and its focus on driving a positive product mix within the Engineered Materials segment into higher value products, BERY renamed the unit Flexibles.
Consumer Packaging - International sales amounted to $917 million (accounting for 32.1% of total sales), down 2% from the year-ago quarter’s figure. Our estimate for segmental revenues was $939.7 million. The decline was due to lower selling prices and volumes as a result of weakness in the industrial and consumer markets in Europe. Operating income of $31 million decreased 34% year over year.
Consumer Packaging - North America’s sales totaled $699 million (accounting for 24.5% of total sales) in the segment, down 8.5% year over year due to a 4% decline in volumes. Our estimate for segmental revenues was $728.6 million. Operating income declined 11.3% year over year to $63 million.
Revenues from the Health, Hygiene & Specialties segment amounted to $603 million (accounting for 21.1% of total sales), down 9.1% year over year due to a 2% decrease in volumes as a result of lower demand in hygiene and specialty markets, partially offset by improved demand in the disinfectant markets. Our .estimate for segmental revenues was $612.9 million. It reported an operating loss of $3 million against an operating income of $34 million in the year-ago quarter.
Revenues from the Flexibles segment amounted to $634 million (accounting for 22.2% of total sales), down 9% year over year due to a 3% decrease in volumes as a result of lower demand in European industrial markets. Our estimate for segmental revenues was $672.1 million. Operating income was $66 million, up 14% year over year.
Balance Sheet and Cash Flow
At the end of the first quarter of fiscal 2024, Berry Global had cash and cash equivalents of $507 million compared with $1.2 billion at the end of fiscal 2023. Current and long-term debt totaled $8.72 billion compared with $8.98 billion at the end of fiscal 2023.
In the fiscal first quarter, Berry Global used net cash of $199 million from operating activities compared with $233 million used in the year-ago period. Capital expenditure totaled $183 million compared with $211 million in the prior-year quarter. In the fiscal first quarter, the company reported a negative adjusted free cash flow of $382 million compared with a negative of $444 million in the year-ago period.
In the fiscal first quarter, BERY repurchased 0.1 million shares for approximately $7 million. It also paid dividends worth $36 million in the same time frame.
Fiscal 2024 Guidance
Berry Global reaffirmed its outlook. It continues to expect adjusted earnings to be in the range of $7.35-$7.85 per share in fiscal 2024. BERY expects cash flow from operations to be in the band of $1.35-$1.45 billion in fiscal 2024. It continues to anticipate free cash flow in the $800-$900 million range during the same time frame. The company remains committed to debt reduction, along with returning capital to shareholders through share repurchases and dividends.
Zacks Rank & Stocks to Consider
Berry Global currently carries a Zacks Rank #3 (Hold). A couple of better-ranked companies from the Industrial Products sector have been discussed below.
PH delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for its 2023 earnings has increased 2.7%.
Flowserve Corporation (FLS - Free Report) presently has a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has remained steady.
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Berry Global (BERY) Q1 Earnings & Revenues Miss Estimates
Berry Global Group, Inc. (BERY - Free Report) reported first-quarter fiscal 2024 (ended December 2023) adjusted earnings of $1.22 per share, which missed the Zacks Consensus Estimate of $1.29. The bottom line decreased 6% year over year.
Net sales of $2.85 billion missed the Zacks Consensus Estimate of $2.99 billion. The top line decreased 7% year over year due to a 3% dip in volumes and lower selling prices, which declined $189 million due to the pass-through of lower resin costs. Reduced demand in the consumer and industrial markets led to the volume decline.
In the fiscal first quarter, Berry Global’s cost of goods sold decreased 6.4% to $2.38 billion. Selling, general and administrative expenses were flat year over year at $235 million. The company reported an operating EBITDA of $431 million, down 2.7% year over year. Adjusted operating income in the quarter decreased 11.1% year over year to $217 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
Concurrently, Berry Global announced its plan to go for a tax-free spin-off and merge the majority of its Health, Hygiene and Specialties segment (comprising the global nonwovens and films business) with Glatfelter Corporation (GLT - Free Report) . In relation to this announcement and its focus on driving a positive product mix within the Engineered Materials segment into higher value products, BERY renamed the unit Flexibles.
Consumer Packaging - International sales amounted to $917 million (accounting for 32.1% of total sales), down 2% from the year-ago quarter’s figure. Our estimate for segmental revenues was $939.7 million. The decline was due to lower selling prices and volumes as a result of weakness in the industrial and consumer markets in Europe. Operating income of $31 million decreased 34% year over year.
Consumer Packaging - North America’s sales totaled $699 million (accounting for 24.5% of total sales) in the segment, down 8.5% year over year due to a 4% decline in volumes. Our estimate for segmental revenues was $728.6 million. Operating income declined 11.3% year over year to $63 million.
Revenues from the Health, Hygiene & Specialties segment amounted to $603 million (accounting for 21.1% of total sales), down 9.1% year over year due to a 2% decrease in volumes as a result of lower demand in hygiene and specialty markets, partially offset by improved demand in the disinfectant markets. Our .estimate for segmental revenues was $612.9 million. It reported an operating loss of $3 million against an operating income of $34 million in the year-ago quarter.
Revenues from the Flexibles segment amounted to $634 million (accounting for 22.2% of total sales), down 9% year over year due to a 3% decrease in volumes as a result of lower demand in European industrial markets. Our estimate for segmental revenues was $672.1 million. Operating income was $66 million, up 14% year over year.
Balance Sheet and Cash Flow
At the end of the first quarter of fiscal 2024, Berry Global had cash and cash equivalents of $507 million compared with $1.2 billion at the end of fiscal 2023. Current and long-term debt totaled $8.72 billion compared with $8.98 billion at the end of fiscal 2023.
In the fiscal first quarter, Berry Global used net cash of $199 million from operating activities compared with $233 million used in the year-ago period. Capital expenditure totaled $183 million compared with $211 million in the prior-year quarter. In the fiscal first quarter, the company reported a negative adjusted free cash flow of $382 million compared with a negative of $444 million in the year-ago period.
In the fiscal first quarter, BERY repurchased 0.1 million shares for approximately $7 million. It also paid dividends worth $36 million in the same time frame.
Fiscal 2024 Guidance
Berry Global reaffirmed its outlook. It continues to expect adjusted earnings to be in the range of $7.35-$7.85 per share in fiscal 2024.
BERY expects cash flow from operations to be in the band of $1.35-$1.45 billion in fiscal 2024. It continues to anticipate free cash flow in the $800-$900 million range during the same time frame. The company remains committed to debt reduction, along with returning capital to shareholders through share repurchases and dividends.
Zacks Rank & Stocks to Consider
Berry Global currently carries a Zacks Rank #3 (Hold). A couple of better-ranked companies from the Industrial Products sector have been discussed below.
Parker-Hannifin Corporation (PH - Free Report) presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
PH delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for its 2023 earnings has increased 2.7%.
Flowserve Corporation (FLS - Free Report) presently has a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has remained steady.