Free Post Earnings Research Report: Sonoco's Net Sales Rose 10.1%; Adjusted EPS Surged 31.0%
LONDON, UK / ACCESSWIRE / July 27, 2018 / If you want access to our free earnings report on Sonoco Products Co. (NYSE: SON) ("Sonoco"), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=SON. The Company reported its second quarter fiscal 2018 operating and financial results on July 19, 2018. The packaging maker outperformed top- and bottom-line expectations. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Earnings Highlights and Summary
For the second quarter of the fiscal year 2018, Sonoco's net sales were $1.37 billion, reflecting an increase of 10.1% compared to $1.24 billion in Q2 2017. The improvement in net sales reflected a growth in sales added by acquisitions, volume growth, the positive impact of foreign exchange, and higher selling prices implemented to recover rising freight and other operating inflation. The Company's revenue numbers beat analysts' estimates of $1.34 billion.
During Q2 2018, Sonoco's gross profit was a record $276.5 million, up 16.0% compared to $238.4 million in Q2 2017. The Company's gross profit as a percentage of sales increased 100 basis points (bps) to 20.2% compared to 19.2% in the prior year's same quarter, primarily driven by manufacturing and procurement productivity.
Sonoco's GAAP net income attributable to common shareholders was $89.4 million, or $0.88 per diluted share, in Q2 2018 compared to $43.1 million, or $0.43 per diluted share, in Q2 2017. The Company's GAAP earnings for the reported quarter included after-tax charges of $4.4 million related to restructuring and acquisition-related expenses. For Q2 2017, Sonoco's GAAP earnings included $28.7 million after tax, related to lump-sum pension settlement distributions, restructuring costs from previously announced plant closures, and acquisition-related expenses.
Adjusted for the aforementioned items, Sonoco's base earnings were $93.8 million, or $0.93 per diluted share, in Q2 2018 compared to $71.8 million, or $0.71 per diluted share, in Q2 2017. The Company's earnings beat Wall Street's estimates of $0.86 per share.
Segment Results
During Q2 2018, Sonoco's Consumer Packaging segment's net sales totaled $616.1 million, up 18.2% compared to $521.3 million in Q2 2017, driven by sales added from acquisitions, a positive impact from changes in foreign exchange rates, and higher selling prices. The segment's operating profit grew 5.5% to $63.7 million in the reported quarter versus $60.4 million in the prior year’s comparable quarter, due to a positive price/cost relationship, solid productivity gains, and the benefit of acquisitions.
For Q2 2018, Sonoco's Display and Packaging segment's sales surged 23.9% to $143.3 million compared to $115.6 million in Q2 2017, primarily due to a volume growth from a new pack center near Atlanta and the positive impact of foreign exchange. The segment reported an operating loss of $0.6 million in the reported quarter compared to an operating profit of $1.5 million in the prior year's corresponding quarter.
Sonoco's Paper and Industrial Converted Products segment's sales were $474.1 million in Q2 2018, up 1.1% from $469.2 million in Q2 2017, led by a volume/mix growth, while the positive impact of foreign exchange more than offset lower selling prices associated with lower recovered paper prices. The segment's operating profit surged 35.4% to $61.5 million in the reported quarter compared to $45.4 million in the year earlier same quarter.
During Q2 2018, Sonoco's Protective Solutions segment's sales were $132.9 million, down slightly from $134.6 million in Q2 2017, as the negative impact of declining foreign exchange rates offset higher selling prices. The segment's operating profit was $13.6 million in the reported quarter, reflecting a 23.7% improvement from $11.0 million in the year earlier comparable quarter, driven by a positive price/cost relationship and productivity improvements.
Cash Matters
For H1 2018, Sonoco's cash generated from operations was $251.2 million compared to $103.2 million in H1 2017. Sonoco's free cash flow was $88.8 million in H1 2018 compared to a negative cash flow of $69.3 million in H1 2017.
As of July 01, 2018, Sonoco's total debt was approximately $1.45 billion compared to $1.45 billion as of December 31, 2017. At the end of H1 2018, the Company had a total-debt-to-total-capital ratio of 44.8% versus 45.6% at December 31, 2017. Sonoco's cash and cash equivalents were $197.7 million as of July 01, 2018, compared to $254.9 million as of December 31, 2017.
Outlook
Sonoco expects base earnings per diluted share to be in the range of $0.82 to $0.88 for the third quarter of the fiscal year 2018, and in the band of $3.27 to $3.37 for the full fiscal year 2018, which is an increase from the previous estimates of $3.22 to $3.32. For FY18, Sonoco's operating and free cash flow guidance have been raised and are expected to be in the ranges of $570 million to $590 million and $190 million to $210 million, respectively.
Stock Performance Snapshot
July 26, 2018 - At Thursday's closing bell, Sonoco Products' stock climbed 1.21%, ending the trading session at $55.92.
Volume traded for the day: 393.23 thousand shares.
Stock performance in the last month - up 8.10%; previous three-month period - up 5.33%; past twelve-month period - up 13.59%; and year-to-date - up 5.23%
After yesterday's close, Sonoco Products' market cap was at $5.61 billion.
Price to Earnings (P/E) ratio was at 39.08.
The stock has a dividend yield of 2.93%.
The stock is part of the Consumer Goods sector, categorized under the Packaging & Containers industry.
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