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AptarGroup (ATR) Earnings & Revenues Top Estimates in Q4

Zacks Equity Research

AptarGroup, Inc. ATR delivered fourth-quarter 2018 earnings per share of 92 cents, beating the Zacks Consensus Estimate of 84 cents by a margin of 10%. Further, the bottom line grew 19% year over year and was higher than management’s guided range of 81-86 cents per share.

 

On a reported basis, the company recorded earnings of 62 cents per share compared with the year-ago quarter’s figure of 77 cents.

 

Operational Update

 

Total revenues improved 9% year over year to $685 million in the reported quarter. Core sales growth was at 7%, acquisitions contributed 6% while unfavorable exchange rates impacted sales by 4%. Further, the top line beat the Zacks Consensus Estimate of $664 million.

 

AptarGroup, Inc. Price, Consensus and EPS Surprise

 

 

AptarGroup, Inc. Price, Consensus and EPS Surprise

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

Adjusted cost of sales rose 12.6% to $447 million from $397 million recorded in the year-ago quarter. Gross profit increased 4% year over year to $238 million, while gross margin contracted 180 basis points (bps) to 34.8%. Selling, research, development and administrative expenses rose 12% year over year to $107 million. Adjusted operating income went up 8% year over year to $85.6 million. AptarGroup’s operating margin shrunk 20 bps year over year to 12.5%. Adjusted EBITDA improved 20% year over year to $141 million in the reported quarter.

Segmental Performance

 

Total revenues in the Beauty + Homes segment inched up 0.7% year over year to $338 million. Operating income in the reported quarter declined 8% year over year to $22.5 million.

 

Total revenues in the Pharma segment were up 23% year over year to $255.8 million. Operating income climbed 27% year over year to $77 million in the fourth quarter.

 

Total revenues in the Food + Beverage segment rose 10% year over year to $91 million. Operating income declined 48% year over year to $3.6 million.

 

Financial Performance

 

AptarGroup reported cash and cash equivalents of $262 million as of Dec 31, 2018, down from $712 million as of Dec 31, 2017. At the quarter end, long-term debt was approximately $1,126 million, down from $1,191 million as of Dec 31, 2017.

 

Fiscal 2018 Performance

 

AptarGroup reported adjusted earnings per share of $4.00 in 2018, up 13% from $3.54 in the prior year. Earnings beat the Zacks Consensus Estimate of $3.92. Including one-time items, earnings came in at $3.00 compared with $3.41 in the prior year.

 

Sales increased 12% year over year to $2.76 billion. The top line beat the Zacks Consensus Estimate of $2.74 billion.

 

Outlook

 

AptarGroup projects adjusted earnings per share for first-quarter 2019 to range between 95 cents and $1.00. The guidance reflects year-over-year growth of 9% at the mid-point. The guidance reflects a higher tax rate (29% to 31%) and higher estimated outstanding share count than the prior year. Negative foreign currency translation will also affect earnings as euro has weakened considerably from prior year. Nevertheless, AptarGroup expects that its core sales will grow in each segment in the current quarter. The company will also continue to focus on its cost pass-through and turnaround efforts.

 

Share Price Performance

 

 

Shares of the company have gained around 13% over the past year, against the industry’s decline of roughly 4%.

 

Zacks Rank & Stocks to Consider

 

AptarGroup currently carries a Zacks Rank #3 (Hold).

 

A few better-ranked stocks in the Industrial Products sector are Axon Enterprise, Inc AAXN, Ennis, Inc. EBF and Alarm.com Holdings, Inc. ALRM. While Axon Enterprise and Ennis sport a Zacks Rank #1 (Strong Buy), Alarm.com Holdings carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Axon has expected earnings growth rate of 14.5% for 2019. The company’s shares have rallied 99% in the past year.

 

Alarm.com has expected earnings growth rate of 7.8% for 2019.  The stock has climbed 68% in the past year.

 

Ennis has expected earnings growth rate of 13.9% for 2019. Its shares have gained 3% in the past year.

 

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