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. Notably, earnings per share came within management's
guidance range of 55-60 cents.
Including facility consolidation and other costs, earnings per
share in the year-ago quarter was 47 cents. As compared to this,
in the reported quarter, Bemis' earnings came in at 48 cents per
share, marking an increase of 2%.
Net sales slid 1.4% year over year to $1.237 billion mainly due
to unfavorable currency translation. Sales fell short of the
Zacks Consensus Estimate of $1.255 billion. Decline in sales was
mainly due to lower sales volumes caused by adverse weather
conditions and inflationary pressure in Brazil.
Cost of products sold increased 1% to $1.02 billion in the
quarter. Gross profit declined 11% year over year to $214.6
million. Gross margin contracted 200 basis points (bps) to 17.3%
in the quarter. Selling, general and administrative expenses
decreased 6% to $122.7 million. Adjusted operating income
declined 21% year over year to $78.8 million. Operating margin
contracted 160 bps to 6.4% in the quarter.
Net sales from the
segment amounted to $738 million, down 1% year over year.
Adjusted segment operating profit decreased 3.8% to $91.8 million
from $95.4 million.
Net sales from the
segment declined 3.2% year over year to $356.8 million. Adjusted
segment operating profit fell 4.7% to $24.1 million from $25.3
million in the year-ago quarter.
Net sales from the
Pressure Sensitive Materials
segment totaled $142.8 million, up 1.6% year over year. Segment
adjusted operating profit was $10.5 million, increasing 36% from
$7.7 million in the prior-year quarter.
As of Mar 31, 2014, Bemis reported cash and cash equivalents of
$152 million versus $141.7 million as of Dec 31, 2013. The
company's total debt increased to $1.44 billion as of Mar 31,
2014 from $1.42 billion as of Dec 31, 2013. Cash flow from
operating activities was $12.5 million in the reported quarter,
compared with $8.4 million in the prior-year quarter.
Bemis repurchased 1.1 million shares worth $43.2 million in the
first quarter. The company increased its quarterly cash dividend
by 4% to 27 cents per share, marking the 31st consecutive annual
In Mar 2014, Bemis completed the sale of its Paper Packaging
Division. A $9.4 million pre-tax gain was recorded on the sale,
as part of other non-operating income in the quarter.
Management expects adjusted earnings per share (EPS) in the range
of 61-66 cents for the second quarter of 2014. For full-year
2014, the company reiterated EPS in the band of $2.40 to $2.55.
Bemis reiterated its projection that cash flow from operating
activities will exceed $500 million in 2014. The company expects
capital expenditures of $175 million for the full year.
We believe that Bemis will benefit from healthy customer order
levels and commercialization of new business at an accelerated
pace, which will support the expected unit volume and profit
margin growth in 2014. However, rise in commodity costs and
volatile economic conditions will remain headwinds in the near
Neenah, WI-based Bemis Company is a global manufacturer of
flexible packaging products and pressure sensitive materials sold
primarily to the food industry. The company also sells its
products to other customers in the chemical, agri-business,
medical, pharmaceutical, personal care, electronics, automotive,
construction and graphic industries.
Currently, Bemis has a Zacks Rank #3 (Hold). Investors interested
in the containers industry could also consider stocks like
Berry Plastics Group, Inc.
Crown Holdings Inc.
), both of which carry a Zacks Rank #2 (Buy).
Notably, another peer of Bemis,
) will release its first-quarter 2014 results on Apr 30.
BERRY PLASTICS (BERY): Free Stock Analysis
BEMIS (BMS): Free Stock Analysis Report
CROWN HLDGS INC (CCK): Free Stock Analysis
MEADWESTVACO CP (MWV): Free Stock Analysis
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