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Will Hurricane Impacts Mar Silgan's (SLGN) Q4 Earnings?

Zacks Equity Research

Silgan Holdings Inc. SLGN is scheduled to report fourth-quarter 2017 results on Jan 30, after the market closes.

Last quarter, Silgan’s earnings missed the Zacks Consensus Estimates. However, the company witnessed an average positive earnings surprise of 3.16% over the trailing four quarters.

Let’s see how things are shaping up for this announcement.

Silgan Holdings Inc. Price and EPS Surprise

 

Silgan Holdings Inc. Price and EPS Surprise | Silgan Holdings Inc. Quote

Factors to Consider

For the fourth quarter, Silgan anticipates earnings per share in the range of 30-35 cents. The mid-point of the guidance range depicts 35% year-over-year growth. The Zacks Consensus Estimates for the company’s EPS is pegged at 32 cents for the quarter. The Zacks Consensus Estimate for sales is at $972 million for this quarter, reflecting growth of around 20.6% year over year.

Notably, our consensus estimates indicate that sales of Silgan’s Closure segment will reach $318 million in the to-be-reported quarter, showing an impressive 74% improvement year over year. The Zacks Consensus Estimate for Metal containers segment sales is pegged at $510 million in the to-be-reported quarter, reflecting 3.8% year-over-year growth. Further, the estimate for Silgan’s Plastic containers segment sales is pegged at $135 million, reflecting growth of around 2.4% year over year.

Hurricanes affected the company’s plastic container business in the third quarter and it will be a headwind in the fourth quarter for business. Further, additional expenses and unfavorable foreign currency translation is likely to dent the company’s results.

Earnings Whispers

Our proven model does not conclusively show that Silgan will likely beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Silgan has an Earning ESP of +0.83%. This is because the Most Accurate estimate of 33 cents per share comes above the Zacks Consensus Estimate of 32 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Silgan carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Share Price Performance

The company’s price performance has not been impressive. Its shares have lost 1.6% in a year’s time, underperforming 2.4% growth recorded by the industry it belongs to.



Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Graphic Packaging Holding Co. GPK, with an Earnings ESP of +0.26% and a Zacks Rank #2. Its shares have gained 13.9%, over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sealed Air Corp. SEE, with an Earnings ESP of +2.05% and a Zacks Rank #3. The company’s shares have been up 7.7% during the same time frame.

Greif, Inc. GEF, with an Earnings ESP of +8.73% and a Zacks Rank #3. The stock has gained 9.6% in six months’ time.

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