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Why Is AptarGroup (ATR) Down 2.3% Since the Last Earnings Report?
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About a month has gone by since the last earnings report for AptarGroup, Inc. (ATR - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 catalysts.
AptarGroup Tops Earnings, Sales Estimates in Q3
AptarGroup reported third-quarter 2017 earnings per share of 83 cents compared with 82 cents in the prior year quarter. Earnings beat the Zacks Consensus Estimate of 80 cents. The figure came within the company’s guidance range of 77-97 cents per share.
Operational Update
Total revenues climbed 6% year over year to $624.3 million in the reported quarter driven by 3% core growth and a 3% favorable impact from exchange rates. It also beat the Zacks Consensus Estimate of $604 million.
Cost of sales increased to $408 million from $381 million recorded in the year-ago quarter. Gross profit rose 3.5% year over year to $216 million, with gross margin contracting 40 basis points (bps) to 35%. Selling, research, development and administrative expenses flared up 10.4% year over year to $95.7 million. Adjusted operating income dropped 7.3% year over year to $69.5 million. AptarGroup’s operating margin contracted 160 bps year over year to 11.1%.
Segmental Performance
Total revenues in the Beauty and Homes segment were up 5.6% year over year to $333.7 million. Operating income dipped 14% to $21.8 million from $25.4 million reported in the year-ago quarter.
Total revenues in the Pharma segment went up 4.3% year over year to $199.5 million. Operating income inched up 0.7% year over year to $55.4 million in the third quarter.
Total revenues in the Food and Beverage segment rose 10.3% year over year to $91 million. Operating income declined 15.8% year over year to $11.7 million.
Financial Performance
AptarGroup reported cash and cash equivalents of $1,019 million at the end of the third quarter, up from $466 million as of Dec 31, 2016. At quarter end, long-term debt was approximately $1,271.5 million, up from $773 million as of Oct 19, 2017. AptarGroup announced a quarterly cash dividend of 32 cents per share.
Outlook
Looking ahead to the fourth quarter, AptarGroup anticipates revenue growth in each segment. For fourth-quarter 2017, AptarGroup expects earnings to be in the range of 68-73 cents. Comparable earnings per share for the prior-year quarter were approximately 77 cents. The company, however, anticipates certain headwinds to remain, including elevated raw material costs and lower results at its decorative facility.
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.
At this time, the stock has a nice Growth Score of B, though it is lagging a bit on the momentum front with a D. Following a similar course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Based on our scores, the stock is more suitable for growth investors than those looking for value.
Outlook
Estimates have been broadly trending downward for the stock and 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 AptarGroup (ATR) Down 2.3% Since the Last Earnings Report?
About a month has gone by since the last earnings report for AptarGroup, Inc. (ATR - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 catalysts.
AptarGroup Tops Earnings, Sales Estimates in Q3
AptarGroup reported third-quarter 2017 earnings per share of 83 cents compared with 82 cents in the prior year quarter. Earnings beat the Zacks Consensus Estimate of 80 cents. The figure came within the company’s guidance range of 77-97 cents per share.
Operational Update
Total revenues climbed 6% year over year to $624.3 million in the reported quarter driven by 3% core growth and a 3% favorable impact from exchange rates. It also beat the Zacks Consensus Estimate of $604 million.
Cost of sales increased to $408 million from $381 million recorded in the year-ago quarter. Gross profit rose 3.5% year over year to $216 million, with gross margin contracting 40 basis points (bps) to 35%. Selling, research, development and administrative expenses flared up 10.4% year over year to $95.7 million. Adjusted operating income dropped 7.3% year over year to $69.5 million. AptarGroup’s operating margin contracted 160 bps year over year to 11.1%.
Segmental Performance
Total revenues in the Beauty and Homes segment were up 5.6% year over year to $333.7 million. Operating income dipped 14% to $21.8 million from $25.4 million reported in the year-ago quarter.
Total revenues in the Pharma segment went up 4.3% year over year to $199.5 million. Operating income inched up 0.7% year over year to $55.4 million in the third quarter.
Total revenues in the Food and Beverage segment rose 10.3% year over year to $91 million. Operating income declined 15.8% year over year to $11.7 million.
Financial Performance
AptarGroup reported cash and cash equivalents of $1,019 million at the end of the third quarter, up from $466 million as of Dec 31, 2016. At quarter end, long-term debt was approximately $1,271.5 million, up from $773 million as of Oct 19, 2017. AptarGroup announced a quarterly cash dividend of 32 cents per share.
Outlook
Looking ahead to the fourth quarter, AptarGroup anticipates revenue growth in each segment. For fourth-quarter 2017, AptarGroup expects earnings to be in the range of 68-73 cents. Comparable earnings per share for the prior-year quarter were approximately 77 cents. The company, however, anticipates certain headwinds to remain, including elevated raw material costs and lower results at its decorative facility.
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.
AptarGroup, Inc. Price and Consensus
AptarGroup, Inc. Price and Consensus | AptarGroup, Inc. Quote
VGM Scores
At this time, the stock has a nice Growth Score of B, though it is lagging a bit on the momentum front with a D. Following a similar course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Based on our scores, the stock is more suitable for growth investors than those looking for value.
Outlook
Estimates have been broadly trending downward for the stock and 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.