) reported record second-quarter 2013 adjusted earnings of 77
cents per share (excluding the cost associated with the Stelmi
acquisition), up 17% from 66 cents in the year-ago quarter. The
results were ahead of the Zacks Consensus Estimate of 74 cents.
APTARGROUP INC (ATR): Free Stock Analysis
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Earnings were on the upper end of management's guidance range of
73 cents to 78 cents. The reported earnings exclude restructuring
charges of 4 cents per share related to the European Operations
Optimization plan compared to 5 cents per share related to costs
associated with the Stelmi acquisition. Including this, earnings
increased 19.6% to 73 cents per share from the prior-year
quarter's earnings of 61 cents.
Total revenue increased 11% year over year to $641 million and
surpassed the Zacks Consensus Estimate of $625 million. Core
sales increased 4% excluding currency effects and acquisition.
Changes in currency exchange rates had no significant impact on
sales in the quarter. Aptar Stelmi contributed approximately $39
million to sales.
Cost of sales went up 10.5% year over year to $431 million in the
reported quarter. Gross profit increased 12% to $210 million from
$187 million in the year-ago quarter. Consequently, gross margin
expanded 30 basis points (bps) to 32.7%.
Selling, research & development and administrative expenses
remained flat year over year at $88 million. Operating income
increased 24.7% to $83.3 million with operating margin expanding
140 basis points (bps) to 13%.
Total revenue in the
Beauty + Homes
segment increased 1.5% year over year to $375 million in the
quarter. Operating income declined 9.5% to $30 million. Segment
sales were driven by increased sales in the beauty and personal
care markets in Europe and the personal care market in Latin
America. However this was offset by weak U.S markets and beauty
markets in Latin America and Asia. Segment operating margin
decreased 100 basis points to 8%.
Total revenue in the
segment increased 37.5% year over year to $182.9 million. Both
legacy business and Aptar Stelmi performed well in the quarter.
Sales to prescription and consumer health care markets improved
from the prior-year quarter. Operating income increased 62% year
over year to $50 million. Operating margin expanded 400 bps year
over year to 27.5%.
Total revenue in the
Food + Beverage
segment jumped 11% year over year to $83 million. Operating
income increased 53% to $11.8 million, mainly on increased sales
in the Lincolnton facility. Operating margin also expanded 400
basis points to 14%.
As of Jun 30, 2013, cash and cash equivalents amounted to $189.9
million versus $229.7 million as of Dec 31, 2012. Total debt
amounted to $387.9 million as of Jun 30, 2013, compared with
$427.5 million as of Dec 31, 2012. The debt-to-capitalization
ratio contracted 210 bps to 21.5% as of Mar 31, 2013 from 23.6%
as of Dec 31, 2012.
Optimization Plan of European Operations
In the reported quarter, AptarGroup incurred around $3.1 million
in expenses on its European optimization plan. Using current
exchange rates, the company expects about $6 million additional
costs, most of which will be incurred in 2013. Annual savings of
roughly $12 million are expected from the plan.
AptarGroup expects earnings in the range of 68 cents to 73 cents
per share for the third quarter of 2013. The guidance does not
include any impact from the European Operations Optimization
plan. The company remains optimistic about the long-term growth
based on the investments in Aptar Stelmi and a strong balance
sheet position. Expansion in certain regions like Latin America
will also contribute to the future earnings and sales.
AptarGroup remains committed to cost containment and development
of innovative products. The company also expects income from the
Beauty + Home segment to improve. The company is also optimistic
about its Pharma business as a boost in capacity should lead to
growth in profitability.
Crsytal Lake, Illinois-based AptarGroup is a leading global
supplier of a broad range of innovative dispensing systems for
the fragrance/cosmetic, personal care, pharmaceutical, and
household and food/beverage markets. AptarGroup currently retains
a Zacks Rank #3 (Hold).
Other companies in the packaging and containers industry with
favorable Zacks Ranks are
Packaging Corporation of America
Sonoco Products Co.
). Both companies hold a Zacks Rank #2 (Buy).
Among Aptar's peers
Bemis Company, Inc.
) reported second-quarter 2013 adjusted earnings of 61 cents per
share, up 13% from 54 cents earned in the year-ago quarter. The
results beat the Zacks Consensus Estimate by a penny and were
within management's 57 cents to 63 cents per share guidance