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Sealed Air (SEE) to Report Q3 Earnings: What to Expect?

Sealed Air Corporation SEE is scheduled to report third-quarter 2023 results on Nov 2 before the opening bell.

Q3 Estimates

The Zacks Consensus Estimate for third-quarter revenues is pegged at $1.36 billion, suggesting a 2.9% dip from the year-ago reported figure. The consensus estimate for quarterly earnings is pinned at 63 cents per share, indicating a year-over-year decline of 35.7%.

Sealed Air Corporation Price and EPS Surprise

 

Sealed Air Corporation price-eps-surprise | Sealed Air Corporation Quote

Q2 Performance

Sealed Air’s second-quarter 2023 earnings and sales decreased year over year.  While earnings beat the Zacks Consensus Estimate, revenues missed the same. The company has a trailing four-quarter earnings surprise of 5.6%, on average.

What the Zacks Model Indicates

Our proven model doesn’t conclusively predict an earnings beat for Sealed Air this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.

Earnings ESP: Sealed Air has an Earnings ESP of -0.57%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank of 3.

Key Factors

Sealed Air has been witnessing a downtrend in overall volumes over the past six reported quarters. This reflects recessionary pressures in the industrial and fulfillment markets. In the Food segment, volumes decreased 0.2% in the second quarter of 2023. This was driven by food retail market declines and the impacts of supply disruptions.

We anticipate these factors, along with customer destocking, to have impacted volumes in the third quarter. Our model projects the Food segment to witness a decline of 3.4% in volumes in the third quarter. For the Protective segment, our model indicates a volume decline of 19.3% in the third quarter.

Our model estimate for the Food segment’s third-quarter net sales is pegged at $898 million, suggesting growth of 8.2% from the prior-year period’s reported figure. The impacts of lower volumes are likely to have been offset by improved pricing (1.6%) and a 10.1% contribution from the recent Liquibox acquisition. Our estimate for the segment’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) stands at $181 million, indicating a year-over-year fall of 2.3%.

Our estimate for the Protective segment’s third-quarter net sales is $464 million, implying a year-over-year fall of 18.7%. This is mainly due to the volume decline, which is likely to have offset pricing growth of 0.7%. Our estimate for the segment’s adjusted EBITDA is pegged at $90.6 million, suggesting a year-over-year decline of 17.3%.

Sealed Air’s overall volumes are expected to decline 9.9%, per our model. We expect pricing growth of 1.2% for the quarter and a contribution of 6% from acquisitions. The company’s third-quarter performance is likely to have been supported by the sustained demand for packaging of food, beverage and healthcare products, and e-commerce activities.

Savings from the company’s Reinvent SEE Strategy initiatives have been driving productivity gains and mitigating supply-chain challenges. This is expected to have driven the operating margin performance in the September-ended quarter.

Price Performance

In the past year, shares of Sealed Air have lost 33.9% compared with the industry’s 1.9% fall.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Stocks to Consider

Here are some Industrial Products stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases.

Kubota Corporation KUBTY, expected to release earnings on Nov 8, has an Earnings ESP of +4.20% and sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for KUBTY’s earnings for the third quarter is pegged at $1.19 per share. The consensus estimate for earnings has moved 2% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 12.7%.

ESAB Corporation ESAB, scheduled to release earnings on Nov 1, has an Earnings ESP of +1.09% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for ESAB’s third-quarter earnings is pegged at 92 cents per share. Earnings estimates have been unchanged in the past 60 days. It has an average trailing four-quarter earnings surprise of 13.6%.

Ingersoll Rand Inc. IR, expected to release earnings on Nov 1, has an Earnings ESP of +0.36%. IR currently carries a Zacks Rank of 3.

The consensus estimate for Ingersoll Rand’s earnings for the third quarter is pegged at 70 cents per share. Earnings estimates have been unchanged in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.9%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Sealed Air Corporation (SEE) : Free Stock Analysis Report

Ingersoll Rand Inc. (IR) : Free Stock Analysis Report

Kubota Corp. (KUBTY) : Free Stock Analysis Report

ESAB Corporation (ESAB) : Free Stock Analysis Report

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