Silgan Holdings (SLGN) Tops Q1 EPS by 7c; Beats on Revenues; FY18 EPS Guidance In-Line

Silgan Holdings (NASDAQ: SLGN) reported Q1 EPS of $0.42, $0.07 better than the analyst estimate of $0.35. Revenue for the quarter came in at $1.01 billion versus the consensus estimate of $982.49 million.

Highlights

• Record net income per share of $0.41
• Record adjusted net income per share of $0.42
• Continued significant improvement in the plastic container business
• Strong growth and accretion from Dispensing Systems operations
• Announced redemption of all outstanding 5% Senior Notes

“We are pleased with our first quarter 2018 results, as we reported record adjusted net income per diluted share of $0.42, an increase of 35.5 percent over the prior year period,” said Tony Allott, President and CEO. “Our closures business continued its strong performance primarily as a result of the inclusion of the Dispensing Systems operations, which was further enhanced by higher volumes in the fragrance, health care and lawn and garden markets. Our plastic container business benefitted in the first quarter of 2018 from higher volumes and continued strong operating performance. As expected, segment income in our metal container business was lower than the prior year, as the planned reduction in the seasonal inventory build resulted in a less favorable absorption of overhead costs,” continued Mr. Allott. “Since much of our performance in the quarter was driven by timing factors, we are confirming our full year 2018 earnings estimate of adjusted net income per diluted share in the range of $2.03 to $2.13, an increase of 26 percent at the midpoint of the range as compared to 2017,” concluded Mr. Allott.

Adjusted net income per diluted share was $0.42 for the first quarter of 2018, after an adjustment increasing net income per diluted share by $0.01. Adjusted net income per diluted share was $0.31 for the first quarter of 2017, after adjustments increasing net income per diluted share by $0.10. A reconciliation of net income per diluted share to “adjusted net income per diluted share,” a Non-GAAP financial measure used by the Company that adjusts net income per diluted share for certain items, can be found in Tables A and B at the back of this press release.

Outlook for 2018

The Company confirmed its estimate of adjusted net income per diluted share for the full year of 2018 in the range of $2.03 to $2.13, which excludes rationalization charges and loss on early extinguishment of debt. This estimate compares to adjusted net income per diluted share for the full year of 2017 of $1.65.

The Company is providing an estimate of adjusted net income per diluted share for the second quarter of 2018, which excludes rationalization charges and loss on early extinguishment of debt, in the range of $0.50 to $0.54. At the midpoint of this range, this estimate reflects a 48.6 percent increase over adjusted net income per diluted share of $0.35 in the second quarter of 2017. The earnings estimate for the second quarter of 2018 anticipates improvement in each of the businesses over the prior year period. The second quarter of 2017 included the unfavorable impact of an $11.9 million charge for the write-up of inventory of the Dispensing Systems operations for purchase accounting.

GUIDANCE:

Silgan Holdings sees FY2018 EPS of $2.03-$2.13, versus the consensus of $2.08.

For earnings history and earnings-related data on Silgan Holdings (SLGN) click here.

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