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AptarGroup (ATR) Q4 Earnings and Revenues Beat Estimates

·5 min read

AptarGroup, Inc. ATR reported fourth-quarter 2021 adjusted earnings per share of 93 cents beating the Zacks Consensus Estimate of 92 cents. The bottom line improved 3% year over year.

On a reported basis, earnings per share was 85 cents compared with the year-ago quarter’s 79 cents.

Total revenues increased 9% year over year to $814 million in the reported quarter on the back of strong growth across each segment. The top line surpassed the Zacks Consensus Estimate of $799 million. Core sales, excluding currency and acquisition effects, improved 10% year over year.

AptarGroup, Inc. Price, Consensus and EPS Surprise

AptarGroup, Inc. Price, Consensus and EPS Surprise
AptarGroup, Inc. Price, Consensus and EPS Surprise

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

Operational Update

Cost of sales soared 111% year over year to $522 million. Gross profit increased 5% year over year to $292 million. Gross margin contracted to 35.9% in the reported quarter compared with the prior-year quarter’s 37.3%.

Selling, research, development and administrative expenses climbed 9% year over year to $140 million. Adjusted operating income advanced 2% year over year to $93.2 million. Adjusted operating margin came in at 11.4% in the reported quarter, down from the year-ago quarter’s 12.2%. Adjusted EBITDA increased 3% year on year to $154 million in the fourth quarter.

Segmental Performance

Total revenues in the Pharma segment grew 7% year over year to $332 million. Adjusted operating income in the quarter rose 2% year over year to $86 million.

Total revenues in the Beauty + Home segment rose 5% year over year to $353 million. Adjusted operating income surged 30% year on year to $14 million in the fourth quarter.

Total revenues in the Food + Beverage segment increased 27% year over year to $129 million. Operating income was $7.2 million in fourth-quarter 2021, reflecting a decline of 18% from the year-ago quarter.

Financial Performance

AptarGroup reported cash and cash equivalents of $123 million as of Dec 31, 2021, down from $300 million as of Dec 31, 2020. The company generated $363 million of cash flow from operations in 2021 compared with $570 million in the last year. As of Dec 31, 2021, long-term debt was approximately $907 million, down from $1,055 million as of Dec 31, 2020.

During 2021, AptarGroup acquired a majority stake in Voluntis, a pioneer in digital therapeutics. It has also bought 80% of Weihai Hengyu Medical Products, adding elastomeric and plastic component manufacturing capabilities in China for injectable drug delivery.

2021 Results

AptarGroup’s adjusted earnings per share improved 4% year over year to $3.88 in 2021. The figure beat the Zacks Consensus Estimate of $3.85. Including one-time items, the company delivered earnings per share of $3.61 in 2021 against earnings per share of $3.21 in 2020. Sales rose 10% year over year to a record $3.23 billion, surpassing the Zacks Consensus Estimate of $3.21 billion.

Outlook

The company anticipates solid growth in the Pharma segment in the first quarter of 2022. The prescription division is expected to witness growth in the allergy category on indications that destocking is ending across most accounts. Other areas of the Pharma segment will perform well, especially active material solutions where demand for in-home COVID-19 antigen tests is expected to remain elevated. The beauty business and beverage businesses are showing signs of recovery. However, the emergence of other COVID-19 variants may put a rein on these recoveries.

AptarGroup anticipates supply chain disruptions to continue in the near term, primarily impacting business in the United States. In certain cases, these headwinds are expected to impact certain customers in both Beauty + Home and Food + Beverage segments. Currency headwinds may continue in the near term. Meanwhile, ATR will continue to control costs, improve efficiencies, and implement price hikes to counter the inflationary pressures.

AptarGroup estimates first-quarter 2022 adjusted earnings per share in the range of 92 cents to $1.00.

Price Performance

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Shares of the company have fallen 12.6% in the past year, against the industry’s growth of 9.3%.

Zacks Rank and Stocks to Consider

AptarGroup currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Industrial Products sector include Dover Corporation DOV, Silgan Holdings Inc. SLGN and Applied Industrial Technologies, Inc. AIT, each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dover’s fourth-quarter 2021 adjusted EPS increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.

Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4%. DOV’s shares have rallied around 30% in a year.

Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.

Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 10%.

Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.

Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 18.5% in a year.


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