Berry Plastics Group (BERY) Tops Q2 EPS by 13c, Beats on Revenue; Reaffirms FY17 Guidance

Berry Plastics Group (NYSE: BERY) reported Q2 EPS of $0.79, $0.13 better than the analyst estimate of $0.66. Revenue for the quarter came in at $1.81 billion versus the consensus estimate of $1.79 billion.

Outlook

“Looking ahead, we will continue our focus on reducing our leverage ratio to a goal of below 4, on or before the end of fiscal 2017. Additionally, we remain excited about our recent acquisition of AEP, and the results to date have validated our expectations of the synergy potential and scale advantages through the combined businesses. Based on our progress to date, we are increasing our annual cost synergy target for the AEP acquisition from our initial $50 million to $70 million. Throughout the remainder of the year we will continue to work on further cost reduction opportunities,” stated Salmon.

Today, we are also reaffirming our fiscal year 2017 projected cash flow from operations of $925 million and adjusted free cash flow of $550 million. These estimates include the recent acquisition of AEP completed on January 20, 2017, the $60 million tax receivable payment that was made in the first fiscal quarter and assumes net capital expenditures of $315 million. Additionally, our cash interest expense is forecasted to be $275 million for fiscal 2017. Within our guidance, we are also assuming $80 million of cash used for other taxes, primarily related to state and international jurisdictions, and other cash uses of $60 million related to items such as acquisition integration expenses and costs to achieve synergies.

Highlights:

• Net income for the March 2017 quarter was $72 million ($0.54 per diluted share) compared to $59 million ($0.47 per diluted share) in the prior year quarter. Adjusted net income in the March 2017 quarter was 36 percent higher at $0.79 per diluted share compared to $0.58 per diluted share in the prior year quarter.
• Net sales increased 12% over the prior year quarter and was a quarterly record at $1 billion 806 million. Operating income for the quarter increased to $175 million compared to $165 million in the prior year quarter. Operating EBITDA was also a quarterly record at $336 million (18.6% of net sales).
• Cash flow from operations for the last four quarters ended March 2017 was $829 million, and adjusted free cash flow for the same period was $524 million.
• We are reaffirming our fiscal 2017 guidance of projected cash flow from operations of $925 million and adjusted free cash flow of $550 million.
• Increased our annual cost synergies for the AEP acquisition from our original guidance of $50 million to $70 million.

For earnings history and earnings-related data on Berry Plastics Group (BERY) click here.

You May Also Be Interested In

• O'Reilly Automotive (ORLY) Misses Q1 EPS by 7c, Offers Guidance
• Celestica (CLS) Tops Q1 EPS by 14c
• Northrim BanCorp (NRIM) Tops Q1 EPS by 54c