Earnings momentum for
PH Glatfelter Co.
) is on the rise following its forecast-topping second-quarter 2012
results, posted on July 31. The specialty papers maker has beaten
the Zacks Consensus Estimate in 8 of the last 12 quarters,
including a staggering 140% positive earnings surprise most
recently. This Zacks #2 Rank (Buy) stock offers a healthy dividend
yield of 2.2% and is expected to deliver double-digit earnings
growth in 2012 despite the fragile economic environment in Europe.
Huge Beat in 2Q
Glatfelter reported adjusted (barring one-time items) earnings of
12 cents per share in the second quarter, trouncing the Zacks
Consensus Estimate by 7 cents. Results were aided by the company's
aggressive cost containment measures and benefits from share
Revenues, however, dipped 3.3% year over year to $384.7 million as
the company witnessed declines across the board. Revenues from the
core Specialty Papers unit edged down 1.2% while Composite Fibers
sales fell 6.7%. Moreover, sales clipped 4.5% in the Advanced
Airlaid Materials unit. Unfavorable currency exchange translation
and difficult economic conditions in Europe weighed on the results.
Glatfelter expects to continue benefiting from its ongoing growth
initiatives. The company anticipates shipping volume for Specialty
Papers to improve roughly 5% in the third quarter. For both the
Composite Fibers and Advanced Airlaid Materials businesses, it
expects shipping volumes to be modestly higher sequentially in the
third quarter while selling prices are expected to be in tandem
with the second quarter.
Earnings Estimates Moving Higher
For 2012, two of three estimates have been revised higher in the
last 30 days, sending the Zacks Consensus Estimate up by a penny
(or 0.8%) to $1.31 a share. This reflects estimated year over year
growth of roughly 29.4%. However, there has been a solitary
downward revision as well over the same period.
For 2013, one of three estimates has moved up in the last 30 days,
raising the Zacks Consensus Estimate by a couple of cents (or 1.4%)
to $1.50 per share. This indicates a projected year over year
growth of 14.8%.
Glatfelter has been consistently paying a quarterly dividend of 9
cents per share since October 2003. The company, in June 2012,
declared its most recent quarterly dividend, affirming a yield of
Glatfelter trades at a discount to its peers by most metrics. It is
currently trading at a forward P/E of 12.43x, a roughly 25%
discount to the peer group average of 16.55x. Moreover, its
trailing twelve months P/E of 14.12x is lower than the peer group
average of 15.4x. The price-to-book of 1.35x is also below the peer
group average of 1.40x.
Chart Reflects Growth
Glatfelter's price performance has been reasonably healthy with the
chart showing an upward trend since March 2009 with a few
intermittent retracements. The consistent growth in earnings
estimates have pushed the stock higher, which should draw
With a series of earnings beats, healthy growth trajectory, rising
earnings estimates, an attractive dividend yield, reasonable
valuation and a leading market position across a number of product
lines, Glatfelter is a good bet for investors seeking both growth
Founded in 1864, P.H. Glatfelter Co. makes specialty papers and
fiber-based engineered materials. Its offerings include security
papers, book publishing papers, envelopes, converting papers,
shopping bags, food and beverage paper, metallized products,
composite laminates papers and feminine hygiene products.
Glatfelter, which has a market cap of $692 million, markets its
products directly and through wholesale paper merchants, brokers
and agents in the U.S., and internationally.
GLATFELTER (GLT): Free Stock Analysis Report
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