Reynolds Consumer Products Inc. (NASDAQ: REYN) reported Q1 EPS of $0.30, $0.04 better than the analyst estimate of $0.26. Revenue for the quarter came in at $730 million versus the consensus estimate of $691.96 million.

First Quarter 2020 Financial Highlights:

• Net Revenues of $730 million
• Earnings Per Share of $0.14; Adjusted Earnings Per Share of $0.301
• Net Income of $26 million; Adjusted Net Income of $63 million1
• Adjusted EBITDA of $135 million1

“Despite the challenges of the COVID-19 global pandemic, we were still able to achieve a strong start to the year,” said Lance Mitchell, Reynolds Consumer Products President and Chief Executive Officer. “Our hearts go out to those who are directly or indirectly affected by the pandemic, the serious impacts of which we could not anticipate. Our ability to continue to operate as an essential business is a direct result of our safety culture and management teamwork.”

Mitchell continued, “RCP plant leaders were able to quickly implement procedures and processes that met or exceeded CDC guidelines in our operations to minimize risk, even ahead of state or local mandates. Updated attendance policies for essential workers have allowed flexibility for employees who may have been exposed to COVID-19 to stay home and self-isolate.”

“We quickly implemented a work from home policy for all employees who could do so, successfully transitioning nearly all functions remotely, including our Customer Service, Sales, and Supply Chain teams working with customers and suppliers to accommodate increased demand.”

“We are pleased to support our retail partners. They are continuing to serve the nation’s consumers by implementing additional safety precautions through challenging conditions. We thank them for leading the way as an example through this pandemic and providing essential products to consumers.”

GUIDANCE:

Reynolds Consumer Products Inc. sees FY2020 EPS of $1.85-$1.92, versus the consensus of $1.79.

For the fiscal year ending December 31, 2020, the Company is providing the following updated guidance:

• Net Income to be in the range of $335 million to $355 million
• Earnings Per Share to be in the range of $1.60 to $1.69 per share
• Adjusted EBITDA to be in the range of $695 million to $715 million1
• Adjusted Net Income to be in the range of $388 million to $403 million1
• Adjusted Earnings Per Share to be in the range of $1.85 to $1.92 per share1
• Net Debt to be in the range of $1.9 billion to $2.1 billion1

Mitchell continued “Circumstances surrounding the unpredictability of COVID-19 continue to evolve, making it more difficult to predict the future with certainty. Increased consumer demand driven by changes in buying habits and incremental usage occasions has continued, but is dynamic and not yet normalized, and the current operating environment necessitates additional costs. We believe we are successfully managing and operating the Company during these challenging times and that we are positioned to grow stronger. We will continue to focus on what we can directly influence - keeping our employees safe and managing the business to ensure continued long term earnings growth for our shareholders.”

As a result of increased demand related to the COVID-19 pandemic and the anticipated benefit from lower interest rates, the Company has increased its guidance on all profit measures and reduced its Net Debt target. The Company has assumed the increased demand associated with COVID-19 will continue in the near-term, however, it expects COVID-19 operational-related cost increases to offset the impact of the increased demand resulting in its Adjusted EBITDA forecast for Q2 – Q4 2020 remaining in line with its previous guidance.

The Company acknowledges that the magnitude and duration of increased demand remains uncertain and that the greatest challenge it faces as a result of the pandemic is its ability to maintain the level of supply needed to keep up with the increased demand. The Company is taking steps to add capacity to address the increased demand through both staffing and capital investments. The outlook assumes that the Company can meet demand and that there are no significant disruptions to its operations, supply chain or retail partners for the remainder of fiscal 2020. The Company expects that the COVID-19 related volume increases in 2020 will make it more challenging to show year over year improvement in Adjusted EBITDA in 2021.

For earnings history and earnings-related data on Reynolds Consumer Products Inc. (REYN) click here.