Amcor (AMCR) Q1 Earnings Beat Estimates, Revenues Dip Y/Y
Amcor Plc AMCR reported first-quarter fiscal 2023 (ended Sep 30, 2023) adjusted earnings per share (EPS) of 16 cents, which surpassed the Zacks Consensus Estimate of 14 cents. The bottom line fell 11% from the year-ago quarter.
Including special items, the company reported net earnings per share of 11 cents compared with 16 cents in the prior-year quarter.
Total revenues fell 7.2% year over year to $3,443 million in the reported quarter. The downside was driven by a 2% unfavorable impact of items affecting comparability and a 1% impact of pass-through of lower raw material costs, partially offset by a 2% favorable impact of movements in foreign exchange rates. The top line surpassed the Zacks Consensus Estimate of $3,345 million.
The price/mix had benefits of around 2% on sales. The volume was down 8% from the year-ago quarter.
Cost and Margins
The cost of sales was down 8.1% year over year to $2,798 million. Gross profit fell 3.4% year over year to $645 million. The gross margin was 18.7% compared with the year-ago quarter’s 18%.
SG&A expenses were $302 million, flat year over year. Adjusted operating income was $358 million in the quarter, down 8.7% from $392 million in the prior-year quarter. The adjusted operating margin was 10.4% compared with 10.6% in the prior-year quarter. Adjusted EBITDA in the quarter was $459 million compared with $494 million in the prior-year quarter.
Amcor PLC Price, Consensus and EPS Surprise
Amcor PLC price-consensus-eps-surprise-chart | Amcor PLC Quote
Segmental Performance
Flexibles: Net sales decreased 8% year over year to $2,568 million. Volume was down 8% year over year due to lower consumer demand and customer destocking. Our model projected net sales of $2,562 million and a year-over-year volume decline of 9.7%. Adjusted operating income fell 5% year over year to $322 million. We expected an adjusted operating income of $313 million.
Rigid Packaging: The segment reported net sales of $875 million in the reported quarter, down 6% from the prior-year quarter. Volume was down 7% year over year. We expected net sales to be $861 million and volumes to fall 9.5% from the prior-year quarter. Adjusted operating income was $62 million, down 6% year over year due to lower volumes, partly offset by the price/mix benefits and a favorable cost performance. Our prediction for the segment’s operating income was $58 million.
Financial Updates
As of Sep 30, 2023, Amcor had $524 million of cash and cash equivalents compared with $689 million as of Jun 30, 2023. The company used $135 million of cash in operating activities in the first quarter of fiscal 2023 compared with $260 million in the year-ago quarter.
As of Sep 30, 2023, Amcor’s net debt totaled $6.6 billion, up from $6.1 billion as of Jun 30, 2023.
Amcor returned $205 million to shareholders in the third quarter as dividends and share repurchases. It has targeted total share repurchases of $70 million for fiscal 2024.
FY24 Guidance
The company reaffirms its adjusted EPS at 67-71 cents for fiscal 2024. AMCR projects an adjusted free cash flow of $850-$950 million for fiscal 2024.
Price Performance
In the past year, Amcor’s shares have lost 14% against the industry’s growth of 4.1%.
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Zacks Rank & Stocks to Consider
Amcor currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Industrial Products sector are Brady BRC, Applied Industrial Technologies AIT and Emerson Electric Co. EMR. BRC currently sports a Zacks Rank #1 (Strong Buy), and AIT and EMR have a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Brady’s 2023 earnings per share is pegged at $3.62. The consensus estimate for 2023 earnings has moved 13% north in the past 60 days and suggests year-over-year growth of 9.9%. The company has a trailing four-quarter average earnings surprise of 7.2%. Shares of BRC rallied 17.7% in the last year.
Applied Industrial has an average trailing four-quarter earnings surprise of 15%. The Zacks Consensus Estimate for AIT’s 2023 earnings is pegged at $9.13 per share, which indicates year-over-year growth of 2%. Estimates have moved up 2% in the past 60 days. The company’s shares gained 27% in the last year.
Emerson has an average trailing four-quarter earnings surprise of 7.4%. The Zacks Consensus Estimate for EMR’s 2023 earnings is pegged at $4.45 per share. The consensus estimate for 2023 earnings has moved 1% north in the past 60 days. EMR shares gained 5.9% in the last year.
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