Back to top

Greif (GEF) Q4 Earnings & Revenue Miss Estimates, Up Y/Y

Read MoreHide Full Article
Greif, Inc. (GEF - Free Report) reported adjusted earnings of $1.08 per share for fourth-quarter fiscal 2018 (ended Oct 31, 2018), missed the Zacks Consensus Estimate of $1.18 by a margin of 8%. However, the figure improved 10% year over year.
 
Including one-time items, the company reported earnings of 67 cents per share, higher than 57 cents per share recorded in the year-ago quarter.
 
Operational Update
 
Revenues increased 2% year over year to $988 million from $968 million generated in the prior-year quarter. However, the figure lagged the Zacks Consensus Estimate of $1,017 million.
 
Greif, Inc. Price, Consensus and EPS Surprise
 
 
Greif, Inc. Price, Consensus and EPS Surprise

Greif, Inc. price-consensus-eps-surprise-chart | Greif, Inc. Quote

Cost of sales dipped 0.4% year over year to $783 million. Gross profit inched up 2% to $205 million from $182 million reported in the year-ago quarter. Gross margin expanded 190 basis points (bps) to 20.7% in the reported quarter.

Selling, general and administrative (SG&A) expenses declined 3% year over year to $92 million. Adjusted operating profit increased 27% year over year to $113 million. Adjusted operating margin improved 230 bps year over year to 11.5% in the reported quarter.
 
Segmental Performance
 
Sales in the Rigid Industrial Packaging & Services decreased 0.7% year over year to roughly $658 million. Adjusted operating profit inched up 1% year over year to $53 million.
 
The Paper Packaging segment’s sales grew 10% year over year to $245 million. The segment’s adjusted operating profit surged 57% to $54 million from the year-ago quarter.
 
Sales of the Flexible Products & Services segment rose 2% year over year to $78million. The segment reported adjusted operating profit of $5 million, a substantial improvement from $0.6 million witnessed in the year-earlier quarter.
 
The Land Management segment’s sales improved 15% year over year to $7.5 million. Adjusted operating income remained flat at $1.8 million.
 
Financial Position
 
Greif ended fiscal 2018 with cash and cash equivalents of $94 million compared with $142 million as of fiscal 2017-end. Cash flow from operations came in at $253 million during fiscal 2018, compared with $305 million reported in the last fiscal.
 
On Dec 4, Greif’s board of directors declared quarterly cash dividends of 44 cents per share of Class A Common Stock and 65 cents per share of Class B Common Stock. Dividends will be paid on Jan 1, 2019, to stockholders of record at the close of business on Dec 18, 2018.
 
Fiscal 2018 Performance
 
Adjusted earnings for fiscal 2018 came in at $3.53, improving 20% year over year but missed the Zacks Consensus Estimate of $3.63. Including one-time items, the company reported earnings of $3.55 per share, higher than $2.02 per share recorded in the prior fiscal. Revenues increased 6% year over year to $3,874 million from $3,638 million in the prior-year quarter. However, the figure missed the Zacks Consensus Estimate of $3,903 million.
 
Guidance
 
Greif initiated adjusted earnings per share guidance for fiscal 2019 at $3.55-$3.95. The mid-point of the guidance reflects year-over-year growth of 6%. The capital expenditure outlook is at $130-$150 million. Adjusted free cash flow is expected to range in between $175 million and $205 million in fiscal 2019.
 
Share Price Performance
 
 
Over the past year, shares of Greif have lost 41%, compared with the industry’s decline of 13%.
 
Zacks Rank & Key Picks
 
Greif currently carries a Zacks Rank #3 (Hold).
 
Some better-ranked stocks in the same sector are Enersys (ENS - Free Report) , CECO Environmental Corp. (CECE - Free Report) and Northwest Pipe Company (NWPX - Free Report) , all three carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
 
Enersys has a long-term earnings growth rate of 10%. Its shares have rallied 24% in a year’s time.
 
CECO has a long-term earnings growth rate of 15%. The stock has surged 60% over the past year.
 
Northwest Pipe has a long-term earnings growth rate of 10%. The stock has gained 29% over the past year.
 
More Stock News: This Is Bigger than the iPhone!
 
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
 
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. 
 



In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Greif, Inc. (GEF) - free report >>

Northwest Pipe Company (NWPX) - free report >>

CECO Environmental Corp. (CECE) - free report >>

Enersys (ENS) - free report >>

More from Zacks Analyst Blog

You May Like

Published in