Sonoco Products Company SON reported adjusted earnings per share (EPS) of $1.17 in fourth-quarter 2024, which missed the Zacks Consensus Estimate of $1.18. The figure was within the company’s guided range of $1.15- $1.35. The figure excludes the impact of the Eviosys acquisition that was completed on Dec. 4, 2024. However, including this impact, adjusted EPS for the quarter was $1.00, 2% lower than the $1.02 in the year-ago quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Including one-time items, the company reported a loss of 57 cents per share from continuing operations against the year-ago quarter’s EPS of 61 cents. Including discontinued operations, fourth-quarter 2024 loss was 44 cents per share compared with 82 cents per share in the year-ago quarter.
Sonoco Products Company Price, Consensus and EPS Surprise
Sonoco Products Company price-consensus-eps-surprise-chart | Sonoco Products Company Quote
SON Witnesses 2% Increase in Q4 Sales
Sonoco’s net sales were $1.36 billion, which missed the Zacks Consensus Estimate of $1.75 billion. The top line was up 2% year over year from the adjusted figure of $1.34 billion in the year-ago quarter.
The increase was attributed to low single-digit volume gains and partial contribution from Eviosys following the completion of its acquisition. This was somewhat offset by the loss of net sales from the divestiture of the Protective Solutions (Protexic) business and the treatment of recycling operations as a procurement function beginning Jan. 1, 2024, as well as lower selling prices.
Including discontinued operations, the company had reported net sales of $1.64 billion in prior year quarter.
Sonoco’s Margins Contract in Q4
The cost of sales was $1.08 billion, 3% higher than the year-earlier quarter. The gross profit totaled $283 million, down 1.7% year over year. The gross margin was 20.8% compared with the year-ago quarter’s 21.6%.
Selling, general and administrative expenses amounted to $221 million, up 25% year over year.
Adjusted operating income was $127 million, down 5% from the prior-year quarter’s $134 million. The operating margin was 9.3%, down from the year-ago quarter’s 10.1%.
Adjusted EBITDA was $247 million, up 4.6% from the year-ago quarter.
SON’s Segment Performances in Q4
The Consumer Packaging segment’s net sales rose 18% year over year to $705 million. The increase reflected partial December sales attributable to Eviosys after its acquisition and year-over-year volume growth in rigid paper containers, partially offset by lower selling prices. The segment’s adjusted EBITDA amounted to $100 million, up 9% from the prior-year quarter.
Net sales in the Industrial Paper Packaging segment were $571 million, reflecting a year-over-year decline of 4%. Gains from higher volumes and higher selling prices were offset by lower sales related to the treatment of recycling as a procurement function effective Jan. 1, 2024. Adjusted segment EBITDA totaled $102 million, reflecting 11.9% year-over-year growth.
Sales for the All Other segment were $88 million, which marked a 40% plunge year over year reflecting the sale of the Protexic business and lower volumes from the remaining businesses. Adjusted EBITDA for the segment totaled $8 million compared with the year-ago quarter’s $23 million.
Sonoco’s Cash Flow & Balance Sheet Updates
SON reported cash and cash equivalents of $431 million at the end of 2024 compared with $139 million at the end of 2023. The company generated cash flow from operating activities of around $834 million in 2024 compared with $883 million in the prior year. At the end of the year, Sonoco had available liquidity of $1.7 billion, comprising available borrowing capacity under its revolving credit facility and cash on hand.
As of Dec. 31, 2024, Sonoco’s total debt was around $7 billion, up from $3 billion as of Dec. 31, 2023.
Sonoco entered into an agreement to sell the Thermoformed and Flexibles Packaging business and its global Trident business (which are collectively known as TFP) to TOPPAN Holdings, Inc. for around $1.8 billion. It intends to pursue strategic alternatives for its remaining temperature-assured cold-chain packaging business. Sonoco plans to use the proceeds from divestitures, along with projected strong free cash flow, to lower debt levels.
Sonoco’s Performance in 2024
Sonoco’s adjusted EPS declined 7% year over year to $4.89. The bottom line missed the Zacks Consensus Estimate of earnings of $5.08 per share. The company’s guidance for the year was $5.05-$5.25 per share.
Revenues decreased 2.5% year over year to $5.3 billion. The metric missed the consensus estimate of $6.7 billion.
SON’s 2025 Guidance
Sonoco projects adjusted EPS to be between $6.00 and $6.20. Adjusted EBITDA is expected between $1.3 billion and $1.4 billion. The operating cash flow is expected between $800 million and $900 million.
Sonoco’s Price Performance
SON shares have lost 15.6% in the past year against the industry’s 9.6% growth.
Zacks Investment Research
Image Source: Zacks Investment Research
SON’s Zacks Rank
The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sonoco’s Peer Performances in Q4
AptarGroup, Inc. ATR reported fourth-quarter 2024 adjusted EPS of $1.52, which beat the Zacks Consensus Estimate of $1.26. The bottom line increased 27% year over year from $1.20 per share (including comparable exchange rates). The company expected fourth-quarter 2024 adjusted EPS to be in the range of $1.22-$1.30.
Total revenues increased 1.1% year over year to $848 million. However, the reported figure missed the Zacks Consensus Estimate of $858 million. Core sales, excluding currency and acquisition effects, improved 2% year over year as improved performances in Closures and Pharma were offset by the weaker performance of the Beauty segment.
Packaging Corporation of America PKG reported an adjusted EPS of $2.47 in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $2.51 by a margin of 2%. The bottom line matched PKG’s guidance and grew 16% year over year. The upside was driven by higher prices and mix, improved volume in both segments and lower freight and logistics expenses. However, these gains were somewhat offset by an increase in operating expenses, scheduled maintenance outage expenses, depreciation expenses and other expenses.
Sales in the fourth quarter rose 10.7% year over year to $2.15 billion due to higher volumes and price/mix in both segments. The top line beat the Zacks Consensus Estimate of $2.13 billion.
Amcor Plc AMCR reported second-quarter fiscal 2025 (ended Dec. 31, 2024) adjusted EPS of 16 cents, which met the Zacks Consensus Estimate. The company reported earnings of around 16 cents per share in the year-ago quarter. Gains from improved volumes, continued strong cost performance and benefits from restructuring initiatives were offset by unfavorable impacts from price/mix.
Amcor’s revenues dipped 0.3% year over year to $3.24 billion. The downside was due to a 1% unfavorable impact of foreign exchange and a 1% impact of pass-through of lower raw material costs. The volume rose 2.3% from the year-ago quarter. Price/mix had an unfavorable impact of approximately 2%, primarily due to lower volumes in high-value healthcare categories. The top line missed the Zacks Consensus Estimate of $3.44 billion.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
