Why Is AptarGroup (ATR) Up 4.4% Since the Last Earnings Report?

It has been about a month since the last earnings report for AptarGroup, Inc. ATR. Shares have added about 4.9% 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.

AptarGroup Beats on Q4 Earnings; Revenues Down Y/Y

AptarGroup reported fourth-quarter 2016 earnings per share of $0.69, up 6% year over year. Earnings also beat the Zacks Consensus Estimate of $0.66. Earnings came above the company’s guidance range of $0.63–$0.68 per share. On a reported basis, earnings per share increased 13% to $0.77 from $0.68 in the prior-year quarter.

Operational Update

Total revenue was down 1% year over year to $539 million in the reported quarter, falling short of the Zacks Consensus Estimate of $559 million. Excluding the negative impact from changes in currency exchange rates and the positive impact from acquisitions, core sales decreased by 2%.

Cost of sales declined to $353 million from $360 million in the year-ago quarter. Gross profit remained flat at $186 million with gross margin expanding 50 basis points (bps) to 34.5%. Selling, research, development and administrative expenses went down 3.4% year over year to $81.7 million. Adjusted operating income inched up 0.3% year over year to $69 million. AptarGroup’s operating margin expanded 20 bps year over year to 12.8%.

Segmental Performance

Total revenue in the Beauty and Homes segment dipped 4% year over year to $290.4 million. Operating income increased 4.6% to $21 million from $20 million in the year-ago quarter.

Total revenue in the Pharma segment went up 0.7% year over year to $176 million. Operating income grew 4% year over year to $52 million in the quarter.

Total revenue in the Food and Beverage segment climbed 4.6% year over year to $72.4 million. Operating income declined 13% year over year to $4.7 million.

Financial Performance

AptarGroup reported cash and cash equivalents of $466 million at the end of 2016, down from $490 million as of Dec 31, 2015. At 2016 end, long-term debt was approximately $772 million, down from $761 million as of Dec 31, 2015.

2016 Performance

AptarGroup posted earnings of $3.13 per share for 2016, up 5% year over year. Earnings beat the Zacks Consensus Estimate $3.10. Revenues for full-year 2016 went up 1% year over year to $2.33 billion from $2.32 billion in 2015. Revenues fell short of the Zacks Consensus Estimate of $2.35 billion.

Outlook

For first-quarter 2017, AptarGroup expects earnings to be in the range of $0.72–$0.77. This excludes any potential effects of the timing of costs incurred and any related insurance reimbursements associated with the Aptar Annecy facility fire. Comparable earnings per share for the prior year were approximately $0.74.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

AptarGroup, Inc. Price and Consensus

 

AptarGroup, Inc. Price and Consensus | AptarGroup, Inc. Quote

VGM Scores

At this time, AptarGroup's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, 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 value investors.

Outlook

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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