AptarGroup (ATR) Q3 Earnings Beat Estimates, Revenues Rise Y/Y
AptarGroup, Inc. ATR reported third-quarter 2023 adjusted earnings per share of $1.39, beating the Zacks Consensus Estimate of $1.28. The bottom line increased 46.3% year over year from 95 cents (including comparable exchange rates).
On a reported basis, earnings per share were $1.26 compared with the year-ago quarter’s 81 cents.
Total revenues increased 6.7% year over year to $893 million in the reported quarter. The reported figure surpassed the Zacks Consensus Estimate of $890 million. Core sales, excluding currency and acquisition effects, improved 2% year over year due to strong volume growth in the pharma and beauty segments. We expected core sales to be up 5.5% in the quarter.
Operational Update
Cost of sales rose 3.7% year over year to $567 million. Gross profit improved 12.3% year over year to $326 million. The gross margin expanded to 36.5% in the reported quarter compared with the prior-year quarter’s 34.7%.
Selling, research, development and administrative expenses increased 2% year over year to $138 million. Adjusted operating income increased 35.9% year over year to $131 million. The adjusted operating margin was 14.6% in the reported quarter, up from the year-ago quarter’s 11.5%. Adjusted EBITDA rose 25.8% year over year to $193 million in the third quarter.
AptarGroup, Inc. Price, Consensus and EPS Surprise
AptarGroup, Inc. price-consensus-eps-surprise-chart | AptarGroup, Inc. Quote
Segmental Performances
Total revenues in the Pharma segment increased 13.3% year over year to $389 million. The reported figure missed our estimate of $394 million. Adjusted operating income in the quarter rose 29.1% year over year to $108 million. We predicted a quarterly adjusted operating income of $107 million.
Total revenues in the Beauty segment increased 6.9% year over year to $324 million. Our estimation for the segment’s revenues was $316 million. Operating income improved 19.6% year over year to $20 million in the third quarter. The reported figure missed our operating income prediction of $21.5 million.
Total revenues in the Closures segment decreased 5.6% year over year to $180 million. We estimated revenues to be $179 million in the quarter. Operating income was $15 million in third-quarter 2023, reflecting growth of 40.6% from the year-ago quarter. Our prediction for the quarter was $13 million.
Financial Performance
AptarGroup reported cash and cash equivalents of $152 million as of Sept 30, 2023, up from $142 million as of Dec 31, 2022. The company generated $173 million of cash flow from operations in the third quarter of 2023 compared with $130 million in the prior-year quarter. As of Sept 30, 2023, the long-term debt was $680 million, down from $1,053 million as of Dec 31, 2022.
Outlook
AptarGroup estimates fourth-quarter 2023 adjusted earnings per share of $1.06-$1.14.
Price Performance
Shares of the company have gained 24.9% in the past year against the industry’s fall of 1.9%.
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Zacks Rank and Other Key Picks
AptarGroup currently carries a Zacks Rank #2 (Buy).
Some other top-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. 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’s shares gained 5.9% in the last year.
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