Sonoco's (SON) ThermoSafe Unit Inks Partnership Deal with Unilode
Sonoco Product Company’s SON ThermoSafe unit has entered into an agreement with Unilode Aviation Solutions for the maintenance, repair and handling of the former’s passive bulk temperature-controlled containers at major locations. This move will help transport pharmaceuticals and other temperature-sensitive products safely and efficiently around the globe. Unilode Aviation is the leading provider of outsourced Unit Load Device (ULD) management and repair services.
ThermoSafe’s Pegasus ULD-featured passive bulk temperature-controlled container helps speed up international ground handling and customs processes at lower costs. In fact, the Pegasus ULD’s lighter solution is considerably more damage-resistant than traditional metal containers. Also, the Pegasus ULD comprises a fully integrated, FAA-approved telemetry system, which provides real-time, cloud-based data on payload and ambient temperature as well as major environmental factors, matched with GPS location.
This partnership provides an innovative solution for the rapid expansion of preparation, handling and repair services to specialized ULD manufacturers and service providers in the pharmaceutical industry and airline market, on a global basis. Also, this will aid in the distribution of COVID-19 vaccines and other pharmaceutical products, which require temperature-controlled containers.
Sonoco’s fourth-quarter 2020 earnings and revenues beat the Zacks Consensus Estimates and increased year over year. Solid productivity improvements, higher volumes and contributions from acquisitions supported its results.
The company’s Protective Solutions segment is likely to witness higher demand in the pharmaceutical and appliance-served markets during the March-end quarter. The ThermoSafe packaging business is anticipated to gain from a strong flu vaccine season and solid demand from its base pharmaceutical and food customers in first-quarter 2021.
Moreover, the company’s Consumer Packaging segment will continue to gain from robust demand for food packaging due to at-home eating habits amid the pandemic. Demand in the Industrial Paper Packaging segment’s served markets is improving, while paperboard operations in North America are gaining from elevated demand for the tissue and towel markets.
Considering these factors, Sonoco projects adjusted earnings per share between $3.40 and $3.60 for 2021, indicating year-over-year growth of 3% at the midpoint. Management also expects sales volume improvement across all segments.
The company is focused on driving growth and margin expansion and generating solid free cash flow. Moreover, Sonoco’s focus on optimizing businesses through productivity improvement, standardization and cost control will aid its performance in the near term.
Price Performance
Shares of Sonoco have surged 54% over the past year compared with the industry's growth of 67.5%.
Zacks Rank & Stocks to Consider
Sonoco currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Industrial Products sector are Deere & Co. DE, AGCO Corp. AGCO and Dover Corp. DOV, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Deere has a projected earnings growth rate of 82.5% for fiscal 2021. Over the past year, the company’s shares have appreciated 133.2%.
AGCO has an estimated earnings growth rate of 29.9% for the ongoing year. The company’s shares have surged 134.1% in the past year.
Dover has an expected earnings growth rate of 13.7% for 2021. The stock has gained 38.7% in a year’s time.
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