Silgan Holdings (NASDAQ: SLGN) reported Q1 EPS of $0.75, $0.05 better than the analyst estimate of $0.70. Revenue for the quarter came in at $1.26 billion versus the consensus estimate of $1.2 billion.

Highlights

• Record net income of $0.66 per diluted share
• Record adjusted net income of $0.75 per diluted share
• Volume increases of 9 percent in each of the Dispensing and Specialty Closures segment and Metal Container segment
• Issued $500 million of 1.4% Senior Secured Notes due 2026
• Increased cash dividend per share by 16.7 percent

“We are very pleased to report continued record financial performance in the first quarter of 2021, with a 20% increase in sales and a 32% increase in adjusted earnings per diluted share over the previous record first quarter of 2020,” said Tony Allott, Chairman and CEO. “Our businesses exceeded a very strong prior year quarter that had been positively impacted by the initial pantry stocking in response to the global Covid-19 outbreak, and earnings grew solidly despite power and supply chain disruptions associated with winter storms across the southern U.S. and unparalleled increases in resin costs,” continued Mr. Allott.

“As we began 2021, we renamed two of our segments to better capture the evolving nature of their products and ongoing strategic focus. Our Dispensing and Specialty Closures segment, formerly Closures, lead the way in the first quarter with significant growth and profit expansion driven by continued strength in the personal care, hygiene and health care markets and an early recovery in the fragrance market. This segment is now our largest in terms of profit and is expected to continue to grow as markets recover and our recently combined management team continues to deliver the Silgan customer service and operating models in these strategic markets. As expected, our industry leading Metal Container segment posted further volume growth over the record first quarter of 2020 as consumers continued to value the cost, quality and sustainable advantage of these products. Segment income in Metal Containers continued to benefit from strong volumes which further propelled us to incur one-time investments in hiring and training costs associated with a spike in onboarding new employees to more efficiently support increased demand levels. In addition, Metal Containers segment income was negatively impacted by higher costs due to operational challenges associated with winter storm Uri and rationalization charges in our European operations. Our Custom Containers segment, formerly Plastic Containers, continued to benefit from a more favorable mix of products sold and strong operational performance, partially offset by delays in passing through unprecedented resin inflation experienced late in the quarter,” continued Mr. Allott.

“We are confirming our outlook for full year 2021 adjusted earnings per diluted share in a range of $3.30 to $3.45, which had envisioned this strong start to the year and continuing strong demand for our products and represents a 10.3 percent increase at the midpoint over record 2020 levels. For the second quarter of 2021, we anticipate adjusted earnings per diluted share in a range of $0.75 to $0.85, as compared to a record $0.85 in the second quarter of 2020 and significantly in excess of any previous second quarter. The second quarter of 2020 benefited from an outsized liquidation of inventory to meet significant customer demand as home lockdowns were enacted across the globe. Our current year second quarter estimate anticipates continued strong product demand, which will be partially offset by a significant impact from contractual lags in passing through the unprecedented inflation in resin and other raw materials. Our full year earnings estimate assumes a subsequent benefit, as we anticipate benefiting from the lagged pass through of these costs as they return to more normal levels,” concluded Mr. Allott.

GUIDANCE:

Silgan Holdings sees Q2 2021 EPS of $0.75-$0.85, versus the consensus of $0.87.

Silgan Holdings sees FY2021 EPS of $3.30-$3.45, versus the consensus of $3.37.

The Company maintained its estimate of adjusted net income per diluted share for the full year of 2021 in the range of $3.30 to $3.45, a 10.3 percent increase at the midpoint of such range over record adjusted net income per diluted share of $3.06 in 2020.

The Company is also providing an estimate of adjusted net income per diluted share for the second quarter of 2021 in the range of $0.75 to $0.85, as compared to a record $0.85 in the second quarter of 2020. The second quarter of 2020 benefited from an outsized liquidation of inventory to meet strong customer demand as pantries were filled at the beginning of the Covid-19 outbreak. The current year second quarter estimate anticipates continued strong product demand, which will be partially offset by a significant impact from contractual lags in passing through the unprecedented inflation in resin and other raw materials.

The full year and second quarter estimates of adjusted net income per diluted share for 2021 exclude the impact from rationalization charges and loss on early extinguishment of debt and are predicated on the ability to continue to obtain adequate raw material supply and to benefit from the lagged pass through of higher resin costs as these costs return to more normal levels.

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