Bemis Company, Inc. (BMS) recently announced the realignment of its reporting structure to three segments - U.S. Packaging, Global Packaging and Pressure Sensitive Materials. The new reporting system will be effective after the company reports the fourth quarter results, which is scheduled for release on January 31.
The company earlier had two business segments -- Flexible Packaging and Pressure Sensitive Materials. In the new system, the Flexible Packaging business segment has been segregated to U.S. Packaging and Global Packaging business segments, while the Pressure Sensitive Materials segment remains unchanged.
The U.S. Packaging segment represents all food, consumer, and industrial products packaging-related manufacturing operations located in the United States. The Global Packaging business segment includes all Bemis' packaging-related manufacturing operations located outside of the United States and also includes its global medical device and pharmaceutical packaging manufacturing operations.
The Pressure Sensitive Materials segment manufactures pressure sensitive adhesive coated paper and film substrates sold to the label and graphic markets. The segment also makes pressure sensitive materials for varied industrial applications in the electronics, automotive, construction, medical, and pharmaceuticals fields.
The company stated that the changes will have no effect on the historical consolidated results of operations. The prior-period segment results have been conformed to the new business segment presentation.
Bemis Company’s third-quarter earnings per share (EPS) increased 7% to 60 cents, and were ahead of the Zacks Consensus Estimate. However, net sales declined 5% year over year to $1.29 billion, which fell short of the Zacks Consensus Estimate. Decline in overall unit volumes affected the company’s financial performance during the quarter.
As per the previously issued information consolidated in the new format, net sales for the U.S. Packaging segment were $774.9 million. Adjusted operating profit for the segment was $107.5 million with operating margin of 13.9%.
Net sales for the Global Packaging segment were $377.5 million. The segment’s adjusted operating profit was $25.3 million with operating margin at 6.7%. Net sales from the Pressure Sensitive Materials segment totaled $135.4 million. Segment operating profit was $7.7 million with operating margin of 5.7%.
Weak volume, cautious consumer spending environment, sluggish European economic outlook and rising food costs remain major causes of concern. However, savings from the Bemis cost reduction program due to the closure of unproductive facilities will help offset these pressures. Bemis currently retains a Zacks Rank #3 (Hold).