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Silgan (SLGN) Down 5.3% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Silgan Holdings (SLGN - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Silgan due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Silgan Q4 Earnings Top Estimates, Revenues Dip Y/Y
Silgan Holdings reported adjusted earnings of 63 cents per share in fourth-quarter 2023, beating the Zacks Consensus Estimate of 58 cents. The bottom line decreased 26% year over year but was within the company’s guidance of 55-65 cents.
Including one-time items, earnings were 60 cents per share compared with 22 cents in the prior-year quarter.
Total revenues decreased year over year to $1.34 billion from the prior-year quarter’s $1.45 billion. The top line also missed the Zacks Consensus Estimate of $1.39 billion.
Costs and Margins
In fourth-quarter 2023, the cost of goods sold decreased 8.3% year over year to $1.12 billion. The gross profit decreased 6.1% to $219 million. The gross margin was 16.3% compared with the prior-year quarter’s 16%.
Selling, general and administrative expenses were $96.5 million in the reported quarter, flat year over year. The company reported an operating income of $126 million in the quarter compared with $81 million in the prior-year quarter. The operating margin was 9.4% in the reported quarter compared with the prior-year quarter’s 5.6%.
Segmental Performance
Revenues in the Dispensing and Specialty Closures segment were down 3.4% year over year to $522 million in the fourth quarter. The figure lagged the Zacks Consensus Estimate of $558 million due to a lower volume and mix. Due to the persistent impacts of inflation on consumers and customer destocking activities, impacts of favorable foreign currency translation were offset by double-digit declines in higher volume metal closures.
The operating income for the segment was $68 million in the fourth quarter of 2023 compared with $65 million in fourth-quarter 2022. The figure lagged the Zacks Consensus Estimate of $78 million. The segment’s adjusted operating income was $87 million compared with $75 million in the prior-year period.
The Metal Containers segment’s revenues in the quarter declined 11.8% year over year to $665 million due to lower volumes and less favorable price/mix. However, revenues in the quarter surpassed the Zacks Consensus Estimate of $635 million.
The segment’s operating income in the quarter under review was $56 million, jumping from the prior-year quarter’s $8.5 million. However, the figure surpassed the consensus estimate of $44 million. Adjusted operating income for the segment amounted to $41 million, down 40.2% from the prior-year quarter.
In the Custom Containers segment, revenues were $153 million compared with the year-ago quarter’s $160 million. The figure lagged the Zacks Consensus Estimate of $161 million. Operating income slumped 46% year over year to $6.8 million and missed the consensus estimate of $18.9 million. The segment reported an adjusted operating income of $13 million, up from the previous year’s $11 million.
Financial Updates
The company had cash and cash equivalents of $643 million at the end of 2023 compared with $586 million at the end of 2022. It generated around $483 million in cash from operating activities in 2023 compared with $748 million in 2022.
2023 Performance
Silgan reported record adjusted earnings per share (EPS) of $3.40 for 2023 compared with $4.01 in the prior year. Earnings beat the Zacks Consensus Estimate of $3.35. Including one-time items, the bottom line was $2.98, down 3% from the $3.07 reported in 2022.
Sales were down 6.6% to $5.9 billion from the prior-year figure of $6.4 billion. The top line missed the Zacks Consensus Estimate of $6 billion.
2024 Outlook
Silgan expects 2024 adjusted earnings per share (EPS) between $3.55 and $3.75. For first-quarter 2024, SLGN anticipates adjusted EPS of 60-70 cents.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -6.94% due to these changes.
VGM Scores
At this time, Silgan has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Silgan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Silgan (SLGN) Down 5.3% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Silgan Holdings (SLGN - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Silgan due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Silgan Q4 Earnings Top Estimates, Revenues Dip Y/Y
Silgan Holdings reported adjusted earnings of 63 cents per share in fourth-quarter 2023, beating the Zacks Consensus Estimate of 58 cents. The bottom line decreased 26% year over year but was within the company’s guidance of 55-65 cents.
Including one-time items, earnings were 60 cents per share compared with 22 cents in the prior-year quarter.
Total revenues decreased year over year to $1.34 billion from the prior-year quarter’s $1.45 billion. The top line also missed the Zacks Consensus Estimate of $1.39 billion.
Costs and Margins
In fourth-quarter 2023, the cost of goods sold decreased 8.3% year over year to $1.12 billion. The gross profit decreased 6.1% to $219 million. The gross margin was 16.3% compared with the prior-year quarter’s 16%.
Selling, general and administrative expenses were $96.5 million in the reported quarter, flat year over year. The company reported an operating income of $126 million in the quarter compared with $81 million in the prior-year quarter. The operating margin was 9.4% in the reported quarter compared with the prior-year quarter’s 5.6%.
Segmental Performance
Revenues in the Dispensing and Specialty Closures segment were down 3.4% year over year to $522 million in the fourth quarter. The figure lagged the Zacks Consensus Estimate of $558 million due to a lower volume and mix. Due to the persistent impacts of inflation on consumers and customer destocking activities, impacts of favorable foreign currency translation were offset by double-digit declines in higher volume metal closures.
The operating income for the segment was $68 million in the fourth quarter of 2023 compared with $65 million in fourth-quarter 2022. The figure lagged the Zacks Consensus Estimate of $78 million. The segment’s adjusted operating income was $87 million compared with $75 million in the prior-year period.
The Metal Containers segment’s revenues in the quarter declined 11.8% year over year to $665 million due to lower volumes and less favorable price/mix. However, revenues in the quarter surpassed the Zacks Consensus Estimate of $635 million.
The segment’s operating income in the quarter under review was $56 million, jumping from the prior-year quarter’s $8.5 million. However, the figure surpassed the consensus estimate of $44 million. Adjusted operating income for the segment amounted to $41 million, down 40.2% from the prior-year quarter.
In the Custom Containers segment, revenues were $153 million compared with the year-ago quarter’s $160 million. The figure lagged the Zacks Consensus Estimate of $161 million. Operating income slumped 46% year over year to $6.8 million and missed the consensus estimate of $18.9 million. The segment reported an adjusted operating income of $13 million, up from the previous year’s $11 million.
Financial Updates
The company had cash and cash equivalents of $643 million at the end of 2023 compared with $586 million at the end of 2022. It generated around $483 million in cash from operating activities in 2023 compared with $748 million in 2022.
2023 Performance
Silgan reported record adjusted earnings per share (EPS) of $3.40 for 2023 compared with $4.01 in the prior year. Earnings beat the Zacks Consensus Estimate of $3.35. Including one-time items, the bottom line was $2.98, down 3% from the $3.07 reported in 2022.
Sales were down 6.6% to $5.9 billion from the prior-year figure of $6.4 billion. The top line missed the Zacks Consensus Estimate of $6 billion.
2024 Outlook
Silgan expects 2024 adjusted earnings per share (EPS) between $3.55 and $3.75. For first-quarter 2024, SLGN anticipates adjusted EPS of 60-70 cents.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -6.94% due to these changes.
VGM Scores
At this time, Silgan has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Silgan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.