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Silgan (SLGN) Earnings & Sales Top Estimates in Q4, Up Y/Y

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Silgan Holdings Inc. SLGN reported fourth-quarter 2021 adjusted earnings of a record 79 cents per share, beating the Zacks Consensus Estimate of 73 cents per share. The bottom line increased 32% year over year from the last year’s earnings per share of 60 cents.

Including one-time items, earnings came in at 76 cents per share compared with 54 cents reported in the prior-year quarter.

Total revenues increased 17.3% year over year to $1,439 million, surpassing the Zacks Consensus Estimate of $1,358 million. The upside was driven by pass-through of higher raw material and other manufacturing costs, improved unit volumes across the Dispensing and Specialty Closures and Metal Container segments as well as a favorable mix of products sold in the Metal Container and Custom Container segments. These were partly offset by lower volumes in the Custom Container segment and the unfavorable impact of foreign currency translation.

Cost and Margins

During fourth-quarter 2021, the cost of goods sold climbed 19% year over year to $1,226 million. The gross profit increased 7% to $214 million. The gross margin came in at 15% compared with the prior-year quarter’s 16%.

Selling, general and administrative expenses were $96 million during the reported quarter compared with the year-ago quarter’s $95.7 million. The company reported operating income of $128.7 million in the quarter compared with $105 million in the prior year quarter. The operating margin was 9% in the reported quarter remained flat year over.

Silgan Holdings Inc. Price, Consensus and EPS Surprise

Silgan Holdings Inc. Price, Consensus and EPS Surprise
Silgan Holdings Inc. Price, Consensus and EPS Surprise

Silgan Holdings Inc. price-consensus-eps-surprise-chart | Silgan Holdings Inc. Quote

Segment Performance

Revenues in the Dispensing and Specialty Closures segment were up 22% year over year to $572 million. The segment’s adjusted operating income came in at $63.4 million compared with $59.9 million in the comparable period last year.

The Metal Containers segment’s revenues increased 15% year over year to $687 million. Adjusted operating income in the segment amounted to $58 million compared with the prior-year quarter’s $38 million.

In the Custom Containers segment, revenues came in at $180 million compared with the year-ago quarter’s $161 million. The segment reported an adjusted operating profit of $18 million, down from the year-earlier quarter’s $21 million.

Financial Updates

The company had cash and cash equivalents of $631 million at the end of 2021 compared with $409 million at the end of 2020. The company generated around $557 million cash from operating activities in 2021 compared with $603 million in 2020.

2021 Performance

Silgan reported record adjusted earnings per share (EPS) of $3.40 for 2021 compared with $3.06 reported in the prior year. Earnings beat the Zacks Consensus Estimate of $3.35. Including one-time items, the bottom line came in at $3.23, up 17% from $2.77 reported in 2020.

Sales were up 15% to $5.7 billion from the prior-year figure of $4.9 billion. The top line surpassed the Zacks Consensus Estimate of $5.6 billion.

2022 Outlook

Silgan expects adjusted EPS for 2022 between $3.80 and $4.00, suggesting year-over-year growth of 15% at the mid-point. It expects improved supply chain, labor availability and stable resin cost in the current year. Additionally, SLGN is on track to integrate three acquisitions completed in 2021, which are likely to provide additional significant earnings growth in 2022.

For first-quarter 2022, Silgan anticipates adjusted EPS in the range of 70-80 cents compared with 75 cents reported in first-quarter 2021.

Price Performance

Silgan’s shares have gained 23.2% in the past year compared with the industry’s growth of 5.9%.

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Zacks Rank and Stocks to Consider

Silgan currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are Berry Global Group, Inc. BERY, AGCO Corporation AGCO and Sealed Air Corporation SEE, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Berry Global Group has an estimated earnings growth rate of around 2.9% for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for fiscal 2022 earnings has been revised 2.5% upward.

In a year, BERY has increased 33.6%. Berry Global Group has a trailing four-quarter earnings surprise of 16.5%, on average.

AGCO Corporation has an expected earnings growth rate of 16.4% for 2022. The Zacks Consensus Estimate for current-year earnings has moved 1.2% north in the past 60 days.

AGCO Corporation’s shares have gained 6.8% in the past year. AGCO has a trailing four-quarter earnings surprise of 47.5%, on average.

Sealed Air has a projected earnings growth rate of 16.8% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved 0.9% north in the past 60 days.

SEE’s shares have soared 53.2% in a year. Sealed Air has a trailing four-quarter earnings surprise of 6.5%, on average.


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