) fell 0.33% and closed at $67.14 due to the negative impact of
the overall market movement, a day after the company reported
record results for first-quarter 2014. The company posted record
earnings of 71 cents per share, which rose 11% from adjusted
earnings of 64 cents in the year-ago quarter and beat the Zacks
Consensus Estimate of 67 cents. Earnings per share also came
ahead of the company's guidance range of 65 to 70 cents.
Notably, the prior-year quarter figure excluded charges of 5
cents per share related to the European restructuring plan.
Including these, prior-year earnings came at 59 cents per share.
Total revenue rose 9% year over year to record $676 million,
which also surpassed the Zacks Consensus Estimate of $650
million. Core sales also increased 9%, excluding currency
effects. Changes in currency exchange rates have not contributed
to the sales growth.
Cost of sales went up 8% year over year to $453 million. Gross
profit improved 11.8% to $222.6 million from $199 million in the
year-ago quarter. Consequently, gross margin increased 70 basis
points (bps) to 32.9%.
Selling, research, development and administrative expenses rose
13% year over year to $106.7 million. Adjusted operating income
increased 14.6% year over year to $78.7 million with operating
margin expanded 50 bps to 11.6%.
Total revenue in the
Beauty + Homes
segment increased 7.6% year over year to $391 million, driven by
increased demand from the beauty and personal care market.
Operating income also rose 13.8% to $27.8 million from $24.4
million in the year-earlier quarter due to improved operating
efficiencies in the U.S. and savings realized by European
restructuring plan. The segment's operating margin increased 40
bps to 7.1%.
Total revenue in the
segment rose 15.1% year over year to $194 million, led by strong
demand from the consumer health care and prescription drug
market. Operating income increased 14% to $52.5 million from the
year-ago quarter on the back of strong sales volume. Operating
margin, however, contracted 20 bps year over year to 27%.
Total revenue in the
Food + Beverage
segment increased 6% year over year to $90.5 million. Operating
income rose 6.2% to $9 million from the prior-year quarter.
Operating margin remained flat year over year at 10%.
As of Mar 31, 2014, AptarGroup reported cash and cash equivalents
of $317 million versus $309.9 million as of Dec 31, 2013.
Long-term debt of the company remained flat at $354.8 billion as
of Mar 31, 2014. Debt-to-capitalization ratio expanded 80 bps to
25.8% as of Mar 31, 2014 from 25% as of Dec 31, 2013.
During the quarter, the company bought back 200,000 shares for
$13 million. This brings the remaining balance of shares
authorized for repurchase to approximately $3.8 million.
In addition, on Apr 11, the company increased its quarterly
cash dividend by 12% to 28 cents per share. The dividend will be
paid on May 21, 2014 to stockholders of record on Apr 30, 2014.
AptarGroup expects earnings in the range of 78 to 83 cents per
share for the second quarter of 2014. The guidance does not
include any impact from the European Operations Optimization
plan. The company anticipates depreciation and amortization for
2014 to be around $160 million. Capital expenditures will be
approximately $190 million, including $26 million related to the
Stelmi expansion project.
The company remains committed to cost containment and the
development of innovative products. It expects demand for
innovative dispensing solutions to drive growth. However, the
emerging market currency environments are expected to remain
challenging in the near term. Moreover, earnings will be
negatively impacted by the volatile raw material prices and
Crystal Lake, IL-based AptarGroup is a leading global supplier of
a wide range of innovative dispensing systems for the
fragrance/cosmetic, personal care, pharmaceutical, household and
At present, AptarGroup carries a Zacks Rank #3 (Hold). A
better-ranked stock in the industrial products sector is
Berry Plastics Group, Inc.
), which has a Zacks Rank #2 (Buy).
Performance of Peers
Among AptarGroup's competitors,
Bemis Company, Inc.
) reported first-quarter 2014 adjusted earnings of 58 cents per
share, up 9.4% from 53 cents earned in the year-ago quarter. The
reported figure also surpassed the Zacks Consensus Estimate by a
penny. Earnings per share came within management's guidance range
of 55-60 cents.
Sonoco Products Co.
) posted first-quarter 2014 adjusted earnings of 52 cents per
share, which rose 4% from 50 cents earned in the year-ago quarter
and beat the Zacks Consensus Estimate by a penny. Earnings were
within the company's guided range of 50-54 cents.
A positive price/cost relationship, modest productivity
improvement and decreases in pension and interest expenses helped
offset lost production and sales, which stemmed from a severe
winter across the U.S. and Canada.
APTARGROUP INC (ATR): Free Stock Analysis
BERRY PLASTICS (BERY): Free Stock Analysis
BEMIS (BMS): Free Stock Analysis Report
SONOCO PRODUCTS (SON): Free Stock Analysis
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