Greif (GEF) Misses Q2 Class A EPS by 9c, Slight Miss on Revenues; Boosts FY18 Guidance

Greif (NYSE: GEF) reported Q2 EPS of $0.76, $0.09 worse than the analyst estimate of $0.85. Revenue for the quarter came in at $968.3 million versus the consensus estimate of $970.72 million.

Second Quarter Highlights include (all results compared to the second quarter of 2017 unless otherwise noted):

• Net sales increased by $80.9 million to $968.3 million.
• Gross profit increased by $13.4 million to $195.3 million, despite being adversely impacted by an increase in transportation costs of $7.0 million.
• Operating profit increased by $6.2 million to $87.7 million and operating profit before special items1 increased by $7.7 million to $92.6 million.
• Net income of $45.1 million or $0.77 per diluted Class A share increased compared to net income of $36.0 million or $0.61 per diluted Class A share. Net income, excluding the impact of special items, of $44.7 million or $0.76 per diluted Class A share increased compared to net income, excluding the impact of special items, of $39.3 million or $0.67 per diluted Class A share.
• Cash provided by operating activities decreased by $1.4 million to $58.2 million. Free cash flow2 decreased by $11.3 million to $29.9 million.

“Greif delivered solid second quarter results,” said Greif’s President and Chief Executive Officer, Pete Watson. “Sales, operating profit before special items and earnings each increased versus the prior year quarter, with particularly strong performance seen in our Paper Packaging and Flexible Products segments relative to the prior year quarter. Our Rigid Packaging segment was impacted by customer operational interruptions, weather issues and rising raw material costs. We continue to pass raw material costs along via price adjustment mechanisms and expect an improved second half performance from this segment. Looking ahead, the performance and outlook for our diversified product portfolio leads us to increase our Fiscal 2018 Class A EPS before special items guidance range to $3.45 - $3.70 per share from $3.25 - $3.55 previously.”

GUIDANCE:

Greif sees FY2018 EPS of $3.45-$3.70, versus the consensus of $3.44.

For earnings history and earnings-related data on Greif (GEF) click here.

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