Yahoo Finance Greif (GEF) Earnings Surpass Estimates in Q2, Sales Miss
Greif, Inc. GEF reported adjusted earnings per share (EPS) of $1.77 in second-quarter fiscal 2023 (ended Apr 30, 2023), which surpassed the Zacks Consensus Estimate of $1.31. The bottom line fell 26.6% year over year.
Including one-time items, EPS was $1.90 in the quarter compared with $2.09 in the prior-year quarter.
Operational Update
Sales decreased 21.5% year over year to $1,309 million. The top line missed the Zacks Consensus Estimate of $1,391 million.
The cost of sales was down 25% year over year to $997 million. Gross profit amounted to $312 million, down 7.9% from the prior-year quarter. The gross margin came in at 23.8% compared with the prior-year quarter’s 20.3%.
Selling, general and administrative (SG&A) expenses were $137 million, down 6.9% year-over-year. Adjusted EBITDA decreased 8.9% year over year to $229 million in the fiscal second quarter.
Greif, Inc. Price, Consensus and EPS Surprise
Greif, Inc. price-consensus-eps-surprise-chart | Greif, Inc. Quote
Segmental Performance
Sales in the Global Industrial Packaging segment fell 23% year over year to $748 million. The segment’s adjusted EBITDA amounted to $121 million compared with the year-ago quarter’s $131 million.
The Paper Packaging segment’s sales decreased 19.5% year over year to $555 million in the fiscal second quarter. The segment’s adjusted EBITDA fell to $105 million from the prior-year quarter’s $117 million.
The Land Management segment’s sales totaled $5.9 million in the reported quarter compared with $6.3 million in the year-ago quarter. Adjusted EBITDA was $2.5 million compared with the year-earlier quarter’s $2.7 million.
Financial Position
Greif reported cash and cash equivalents of $159 million at the end of second-quarter fiscal 2023 compared with $109 at the end of second-quarter fiscal 2022. Cash flow from operating activities totaled $211 million in the quarter under review compared with $139 million in the prior-year quarter.
Long-term debt amounted to $2,206 million as of Apr 30, 2023, compared with $1,839 million as of Oct 31, 2022.
On Jun 5, Greif’s board announced a quarterly cash dividend of 50 cents per share of Class A Common Stock and 69 cents per share of Class B Common Stock. The dividends will be paid out on Jul 1 to shareholders of record at the close of business as of Jun 19, 2023.
Outlook
Greif expects fiscal 2023 adjusted EBITDA between $780 million and $830 million. The adjusted free cash flow is anticipated between $390 million and $440 million.
Price Performance
Greif’s shares have gained 5.4% in the past year against the industry’s fall of 10.3%.
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Zacks Rank & Key Picks
Greif currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Hubbell Incorporated HUBB, The Manitowoc Company, Inc. MTW and Pentair plc PNR. HUBB and MTW flaunt a Zacks Rank #1 (Strong Buy) at present, and PNR has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hubbell has an average trailing four-quarter earnings surprise of 21%. The Zacks Consensus Estimate for HUBB’s fiscal 2023 earnings is pegged at $13.81 per share. The consensus estimate for 2023 earnings has moved north by 22.5% in the past 60 days. Its shares gained 45.4% in the last year.
Manitowoc has an average trailing four-quarter earnings surprise of 38.8%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at 85 cents per share. The consensus estimate for 2023 earnings has moved 63.5% north in the past 60 days. MTW’s shares gained 18.6% in the last year.
The Zacks Consensus Estimate for Pentair’s 2023 earnings per share is pegged at $3.66, up 3% in the past 60 days. It has a trailing four-quarter average earnings surprise of 7.2%. PNR gained 14.9% in the last year.
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