Greif (GEF) Misses Q1 EPS by 5c
Greif (NYSE: GEF) reported Q1 EPS of $0.45 per diluted Class A share compared to net income, excluding the impact of special items, $0.05 worse than the analyst estimate of $0.50. Revenue for the quarter came in at $820.9 million versus the consensus estimate of $802.04 million.
First Quarter Highlights include:
- Net sales increased $49.5 million to $820.9 million compared to $771.4 million for the first quarter of 2016.
- Gross profit improved to $163.3 million compared to $151.3 million for the first quarter of 2016. Gross profit margin improved to 19.9 percent from 19.6 percent for the first quarter of 2016.
- Operating profit improved $24.5 million and operating profit before special items improved $8.6 million compared to the first quarter of 2016. Operating profit margin before special items improved to 8.1 percent compared to 7.5 percent for the first quarter of 2016.
- Net income of $5.4 million or $0.10 per diluted Class A share compared to net loss of $(11.1) million or $(0.19) per diluted Class A share for the first quarter of 2016. Net income, excluding the impact of special items, of $26.4 million or $0.45 per diluted Class A share compared to net income, excluding the impact of special items, of $23.0 million or $0.40 per diluted Class A share for the first quarter of 2016.
- Income tax expense for the first quarter of 2017 increased to $11.8 million from $6.0 million for the first quarter 2016, due primarily to changes in income mix, the impact of entities with a valuation allowance, and a change in assertions related to foreign unremitted earnings that triggered a first quarter 2017 charge of $4.4 million.
- Cash used in operating activities increased $17.9 million compared to the first quarter of 2016. Free cash flow2 declined by $9.4 million compared to the first quarter of 2016, primarily due to increased raw material purchases in the first quarter of 2017 compared to 2016 in anticipation of near-term increases in raw material costs.
- During the first quarter of 2017, the Company purchased an annuity contract for approximately $49.2 million with defined benefit pension plan assets and, in connection with such purchase, the pension obligation for certain retirees under that plan in the United States was irrevocably transferred from the plan to the annuity contract. Additionally, lump sum payments totaling $35.1 million were made from defined benefit plan assets to certain participants who agreed to accept such payments, representing the current value of those participants\' respective pension benefit. The settlement items described above resulted in a decrease in projected benefit obligation of $84.3 million and a non-cash settlement charge of $23.5 million
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