Sealed Air Corporation SEE reported third-quarter 2024 adjusted earnings per share (EPS) of 79 cents, which surpassed the Zacks Consensus Estimate of 66 cents by a margin of 19.7%. The bottom line increased 2.6% year over year.
SEE’s results benefited from its cost take-out to grow program (CTO2Grow Program) and cost-control initiatives. Improvement in the Food segment’s results were offset by the continued weakness in the Protective segment.
Including special items, the company delivered EPS from continuing operations of 61 cents compared with the year-ago quarter’s 40 cents.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Sealed Air Corporation Price, Consensus and EPS Surprise
Sealed Air Corporation Price, Consensus and EPS Surprise
Sealed Air Corporation price-consensus-eps-surprise-chart | Sealed Air Corporation Quote
Sealed Air’s Revenues Dip Y/Y
Total revenues were $1.35 billion, which beat the Zacks Consensus Estimate of $1.34 billion. The figure was down 2.7% year over year.
Pricing and currency had unfavorable impacts of 1.8% and 0.4%, respectively. Volumes declined 0.5% year over year as higher volumes in the Food segment were offset by the ongoing weakness in the Protective segment.
Our model predicted unfavorable impact of 2.4% from pricing and a volume decline of 0.5% year over year.
Sales in the Americas were down 3.5% year over year to $876 million, while sales in EMEA were down 4.3% to $273 million. Sales in APAC, however, increased 4% year over year to $196 million.
SEE’s Margins Contract
The cost of sales went down 2.6% year over year to $944 million. The gross profit was $401.5 million, which marked a 3% dip from the year-ago quarter’s $413 million. The gross margin was 29.8%, a marginal contraction from the year-ago quarter’s 29.9%.
SG&A expenses were $187 million, up 3% from the year-ago quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were around $276 million, down 3% from the year-ago period.
Lower volumes and unfavorable net price realization in Protective, partially offset by lower operating costs due to productivity benefits as a result of the CTO2Grow Program, led to the year-over-year decline. The adjusted EBITDA margin was 20.5%, indicating a 10-basis point contraction from the year-ago quarter.
Sealed Air’s Segment Performances in Q3
Food: Net sales increased 0.5% year over year to $898 million. The figure surpassed our estimate of $893 million.
Pricing actions had an unfavorable impact of 1.4%, while volumes were up 2.4%, reflecting strong end-market demand and competitive share gains. Foreign currency had an unfavorable impact of 0.5%. We expected volume growth of 3% and pricing to be down 2.5%.
Adjusted EBITDA was around $206 million, up 6% from the last year’s quarter, aided by higher volumes, favorable net price realization and lower operating costs as a result of its CTO2Grow Program. The reported figure surpassed our estimate of $196 million.
Protective: The segment reported net sales of $447 million, down 8.4% from the year-ago quarter. We had projected net sales to be $422 million.
Pricing had a negative impact of 2.7% and volumes fell 5.7%, due to the ongoing weakness in industrial and fulfillment portfolios. We expected a volume decline of 7% and an unfavorable pricing impact of 2.3%.
The segment’s adjusted EBITDA decreased 21% year over year to $76 million, due to weak volumes and unfavorable net price realization, somewhat offset by a decline in operating costs (aided by efforts to improve productivity). We expected adjusted EBITDA to be $79 million.
SEE’s Cash Flow & Balance Sheet Updates
Cash flow generated from operating activitieswas around $484 million in the first nine-month period of 2024 compared with $193 million in the year-ago comparable period. Sealed Air paid cash dividends of $89 million in the same period.
As of Sept. 30, 2024, Sealed Air’s net debt was $4.1 billion compared with $4.3 billion as of Dec. 31, 2023. As of the end of the third quarter, the company had $1.4 billion of liquidity available, which comprised $386 million in cash and $1 billion of undrawn, committed credit facilities.
Sealed Air Updates 2024 Guidance
Sealed Air expects net sales in 2024 to be in the range of $5.375-$5.425 billion compared with the prior stated guidance of $5.2-$5.6 billion. Adjusted EBITDA is now projected between $1.09 billion and $1.11 billion. SEE had earlier anticipated the metric to be in the range of $1.05 -$1.15 billion.
Adjusted EPS is forecast to be between $3.00 and $3.10 compared with the prior stated range of $2.65-$3.05. Sealed Air’s CTO2Grow Program is expected to yield $90 million of incremental cost savings in 2024.
Free cash flow is expected to be in the range of $350-$450 million, higher than its previous expectation of $325-$425 million.
SEE Stock’s Price Performance
In the past year, Sealed Air’s shares have gained 10.5% compared with the industry’s 18.5% growth.
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Sealed Air’s Zacks Rank
Sealed Air currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
How Did SEE’s Industry Peers Fare in Q3?
AptarGroup, Inc. ATR reported third-quarter 2024 adjusted EPS of $1.49, which beat the Zacks Consensus Estimate of $1.43. The bottom line increased 6% year over year from $1.40 per share (including comparable exchange rates).
Total revenues grew 1.8% year over year to $909 million. However, the reported figure missed the Zacks Consensus Estimate of $932 million. Core sales, excluding currency and acquisition effects, improved 2% year over year due to strong performances in the pharma and closures segments. We expected core sales to rise 4.7% .
Packaging Corporation of America PKG posted an adjusted EPS of $2.65 in the third quarter of 2024, which beat the Zacks Consensus Estimate of earnings of $2.48. The bottom line was higher than the company’s earnings guidance of $2.45 per share and grew 29% year over year. The upside was driven by higher volume in both segments and increased prices and mix in the Packaging segment, partially offset by lower prices and mix in the Paper segment.
Sales rose 12.6% year over year to $2.18 billion due to higher volumes. The top line beat the Zacks Consensus Estimate of $2.09 billion.
Amcor Plc AMCR reported first-quarter fiscal 2025 (ended Sept. 30, 2024) adjusted earnings per share of 16 cents, which met the Zacks Consensus Estimate. The bottom line grew 4% from the year-ago quarter.
AMCR’s total revenues fell 2.6% year over year to $3.35 billion. The downside was due to a 1% unfavorable impact of foreign exchange and 1% impact of pass-through of lower raw material costs. The price/mix had impacts of around 3% on sales. The volume rose 2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.57 billion.
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