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Why Is Greif (GEF) Up 3.9% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Greif Bros. Corporation (GEF - Free Report) . Shares have added about 3.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Greif Q1 Earnings Miss on Estimates, Revenues Beat
The provider of industrial packaging products and services, Greif reported adjusted earnings of $0.45 per share in first-quarter fiscal 2017 (ended Jan 31, 2017), which increased 12.5% year over year. However, earnings fell short of the Zacks Consensus Estimate of $0.50.
Including one-time items, the company posted earnings of $0.10 per share, compared to a loss of $0.19 per share recorded in the year-ago quarter.
Operational Update
Revenues increased 6% year over year to $820.9 million from $771.4 million in the prior-year quarter. Also, revenues beat the Zacks Consensus Estimate of $811 million.
Cost of sales increased 6% year over year to $657.6 million. Gross profit grew 8% year over year to $163.3 million. Gross margin expanded 20 basis points to 19.8% in the quarter. Selling, general and administrative (SG&A) expenses went up 3.6% year over year to $96.6 million. Adjusted operating profit climbed 14.8% year over year to $66.7 million. Adjusted operating margin advanced 50 basis points to 8% in the quarter.
Segmental Performance
Rigid Industrial Packaging & Services: This segment reported sales of $561.5 million, down 5% from $601 million in the year-ago quarter. Adjusted operating profit jumped 22.6% year over year to $43.4 million from $35.4 million.
Paper Packaging: Sales were up 15.5% year over year to $182.9 million, on the back of increases in volumes and increased sales of specialty products. The segment reported an adjusted operating profit of $19.9 million, down 12.3% year over year, due primarily to an increase in pension costs and allocated corporate costs.
Flexible Products & Services: Sales from this segment declined 4.4% year over year to $69.7 million. Excluding the impact of divestitures, sales increased 3.5% mainly due to product volume improvements. The segment reported adjusted operating profit of $1.6 million compared to an operating loss of $1.6 million in the year-earlier quarter.
Land Management: The segment’s sales plunged 30.8% year over year to $1.6 million. Operating income remained flat year over year at $2.1 million.
Financial Position
Greif ended the quarter with cash and cash equivalents of $106.8 million, compared with $103.7 million at the end of the prior-year quarter. Cash used in operations was $44 million for fiscal first quarter compared with cash usage of $26 million in the year-ago quarter. Long-term debt was $1074.8 million as of Jan 31, 2017, compared with $974.6 million as of Oct 31, 2016.
On Feb 28, 2017, Greif declared a quarterly dividend of $0.42 per share of Class A Common Stock and $0.63 per share of Class B Common Stock. The dividends are payable on Apr 1, 2017, to stockholders of record at the close of business as of Mar 17.
Guidance
Greif reaffirmed its fiscal 2017 earnings per share guidance range of $2.78 and $3.08. Compared to the adjusted earnings per share of $2.44 in fiscal 2016, the guidance range depicts year-over-year growth in the range of 14–26%
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been three revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 7.7% due to these changes.
At this time, Greif's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Greif (GEF) Up 3.9% Since the Last Earnings Report?
It has been about a month since the last earnings report for Greif Bros. Corporation (GEF - Free Report) . Shares have added about 3.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Greif Q1 Earnings Miss on Estimates, Revenues Beat
The provider of industrial packaging products and services, Greif reported adjusted earnings of $0.45 per share in first-quarter fiscal 2017 (ended Jan 31, 2017), which increased 12.5% year over year. However, earnings fell short of the Zacks Consensus Estimate of $0.50.
Including one-time items, the company posted earnings of $0.10 per share, compared to a loss of $0.19 per share recorded in the year-ago quarter.
Operational Update
Revenues increased 6% year over year to $820.9 million from $771.4 million in the prior-year quarter. Also, revenues beat the Zacks Consensus Estimate of $811 million.
Cost of sales increased 6% year over year to $657.6 million. Gross profit grew 8% year over year to $163.3 million. Gross margin expanded 20 basis points to 19.8% in the quarter. Selling, general and administrative (SG&A) expenses went up 3.6% year over year to $96.6 million. Adjusted operating profit climbed 14.8% year over year to $66.7 million. Adjusted operating margin advanced 50 basis points to 8% in the quarter.
Segmental Performance
Rigid Industrial Packaging & Services: This segment reported sales of $561.5 million, down 5% from $601 million in the year-ago quarter. Adjusted operating profit jumped 22.6% year over year to $43.4 million from $35.4 million.
Paper Packaging: Sales were up 15.5% year over year to $182.9 million, on the back of increases in volumes and increased sales of specialty products. The segment reported an adjusted operating profit of $19.9 million, down 12.3% year over year, due primarily to an increase in pension costs and allocated corporate costs.
Flexible Products & Services: Sales from this segment declined 4.4% year over year to $69.7 million. Excluding the impact of divestitures, sales increased 3.5% mainly due to product volume improvements. The segment reported adjusted operating profit of $1.6 million compared to an operating loss of $1.6 million in the year-earlier quarter.
Land Management: The segment’s sales plunged 30.8% year over year to $1.6 million. Operating income remained flat year over year at $2.1 million.
Financial Position
Greif ended the quarter with cash and cash equivalents of $106.8 million, compared with $103.7 million at the end of the prior-year quarter. Cash used in operations was $44 million for fiscal first quarter compared with cash usage of $26 million in the year-ago quarter. Long-term debt was $1074.8 million as of Jan 31, 2017, compared with $974.6 million as of Oct 31, 2016.
On Feb 28, 2017, Greif declared a quarterly dividend of $0.42 per share of Class A Common Stock and $0.63 per share of Class B Common Stock. The dividends are payable on Apr 1, 2017, to stockholders of record at the close of business as of Mar 17.
Guidance
Greif reaffirmed its fiscal 2017 earnings per share guidance range of $2.78 and $3.08. Compared to the adjusted earnings per share of $2.44 in fiscal 2016, the guidance range depicts year-over-year growth in the range of 14–26%
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been three revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 7.7% due to these changes.
Greif Bros. Corporation Price and Consensus
Greif Bros. Corporation Price and Consensus | Greif Bros. Corporation Quote
VGM Scores
At this time, Greif's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.