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It has been about a month since the last earnings report for Amcor (AMCR). Shares have added about 2.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Amcor due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Amcor's Q4 Earnings Beats Estimates, Up Y/Y
Amcor reported fourth-quarter fiscal 2021 adjusted earnings per share of 23 cents, that beat the Zacks Consensus Estimate of 22 cents. The figure improved 17% from adjusted earnings of 19 cents per share reported in the year-ago quarter. Including special items, it reported net earnings per share of 16 cents compared with the prior-year figure of 11 cents. Total revenues in fourth-quarter fiscal 2021 increased 10% year over year to $3.45 billion. The top line beat the Zacks Consensus Estimate of $3.32 billion.
Fiscal 2021 adjusted earnings per share was 74 cents, in line with the Zacks Consensus Estimate. Earnings improved 16% from the adjusted earnings of 64 cents per share in fiscal 2020. In constant currency terms, the bottom line climbed 16% year over year. This improvement can be attributed to synergies from the Bemis acquisition.
Including special items, the company reported net earnings per share of 60 cents compared with the prior-year figure of 38 cents.
Revenues increased 3% year over year to $12.86 billion in fiscal 2021. The top line beat the Zacks Consensus Estimate of $12.69 billion. Sales climbed 2% year over year in constant currency terms. Volumes improved 2% than the prior fiscal year.
Adjusted operating income in fiscal 2021 was $1,621 million compared with the prior fiscal year’s $1,497 million. Adjusted operating margin was 13% compared with the prior fiscal year’s 12%. Adjusted EBITDA was $2,028 million, up 6% year over year.
Flexibles: Net sales were up 3% year over year to $10billion in fiscal 2021. Adjusted operating income increased 10% year over year to $1,427 million for fiscal 2021.
Rigid Packaging: The segment reported net sales of $2.8billion in fiscal 2021, up 4% year over year. Adjusted operating income climbed 6% year over year to $299 million.
As of fiscal 2021 end, Amcor had $850 million of cash and cash equivalents compared with $723 million as of the end of the prior fiscal year.
Net cash flow from operating activities was around $1,461 million in fiscal 2021 compared with the $1,384 million seen in the prior fiscal year. Adjusted free cash flow (before dividends) was $1,099 million in fiscal 2021 compared with the prior fiscal year’s $1,220 million.
As of Jun 30, 2021, Amcor’s net debt was $5,439 million compared with $5,491 million as of Jun 30, 2020.
Amcor completed a $350-million share-buyback program in fiscal 2021. Shares repurchased during fiscal 2021 led to a 2% reduction in total number of its issued and outstanding shares. The company has also hiked its annual dividend to 47 cents per share.
Update on Bemis Integration
On Jun 11, 2019, Amcor had completed the all-stock acquisition of Bemis Company. The Bemis integration is progressing well with pre-tax synergy benefits of $75 million realized in fiscal 2021 — ahead of the targeted $65 million. The company expects to exceed the original pre-tax synergy benefits target of $180 million by at least 10% by the end of fiscal 2022.
Fiscal 2022 Guidance
Amcor expects adjusted constant currency earnings per share growth of approximately 7-11% in fiscal 2022. The company projects adjusted free cash flow between $1.1 billion and $1.2 billion in fiscal 2022.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
At this time, Amcor has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Amcor has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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