Yahoo Finance Understanding Greif (GEF) Reliance on International Revenue
Have you assessed how the international operations of Greif (GEF) performed in the quarter ended April 2024? For this industrial packaging company, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.
In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. For investors, understanding a company's reliance on overseas markets has become increasingly crucial, as it offers insights into the company's sustainability of earnings, ability to tap into diverse economic cycles and overall growth potential.
Participation in global economies acts as a defense against economic difficulties at home and a pathway to more rapidly developing economies. However, it also comes with the complexities of dealing with fluctuating currencies, geopolitical risks and different market dynamics.
While delving into GEF's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.
For the quarter, the company's total revenue amounted to $1.37 billion, experiencing an increase of 4.7% year over year. Next, we'll explore the breakdown of GEF's international revenue to understand the importance of its overseas business operations.
A Closer Look at GEF's Revenue Streams Abroad
During the quarter, Europe, Middle East and Africa contributed $355.5 million in revenue, making up 25.9% of the total revenue. When compared to the consensus estimate of $325.78 million, this meant a surprise of +9.12%. Looking back, Europe, Middle East and Africa contributed $294.7 million, or 24.4%, in the previous quarter, and $338.2 million, or 25.8%, in the same quarter of the previous year.
Asia Pacific and Other Americas generated $158 million in revenues for the company in the last quarter, constituting 11.5% of the total. This represented a surprise of +7.43% compared to the $147.07 million projected by Wall Street analysts. Comparatively, in the previous quarter, Asia Pacific and Other Americas accounted for $147.3 million (12.2%), and in the year-ago quarter, it contributed $138.1 million (10.6%) to the total revenue.
Projected Revenues in Foreign Markets
The current fiscal quarter's total revenue for Greif, as projected by Wall Street analysts, is expected to reach $1.39 billion, reflecting an increase of 4.4% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Europe, Middle East and Africa is anticipated to contribute 24.3% or $337.83 million and Asia Pacific and Other Americas 11.3% or $156.29 million.
For the full year, the company is expected to generate $5.28 billion in total revenue, up 1.2% from the previous year. Revenues from Europe, Middle East and Africa and Asia Pacific and Other Americas are expected to constitute 24.5% ($1.29 billion) and 11.6% ($610.1 million) of the total, respectively.
Final Thoughts
Greif's reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.
In a world where international interdependencies and geopolitical conflicts are ever-increasing, Wall Street analysts closely monitor these trends for companies having international presence to adjust their earnings forecasts. Of course, there are several other factors, including a company's standing within its home borders, that influence analysts' earnings forecasts.
At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.
Our proprietary stock rating tool, the Zacks Rank, with its externally validated exceptional track record, harnesses the power of earnings estimate revisions to serve as a dependable measure for anticipating the short-term price trends of stocks.
Currently, Greif holds a Zacks Rank #3 (Hold), signifying its potential to match the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Exploring Recent Trends in Greif's Stock Price
Over the past month, the stock has lost 4.3% versus the Zacks S&P 500 composite's 3.3% increase. The Zacks Industrial Products sector, of which Greif is a part, has declined 4.2% over the same period. The company's shares have declined 3.7% over the past three months compared to the S&P 500's 4.1% increase. Over the same period, the sector has declined 3.7%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Greif, Inc. (GEF) : Free Stock Analysis Report
