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AEP Industries' FY12 Profit Soars - Analyst Blog

Posted: 1/24/2013 8:50:00 AM
Referenced Stocks: AEPI;BMS;GPK;UFPT

Plastic packaging films maker AEP Industries Inc ( AEPI ) saw a solid jump in its fiscal 2012 (ended Oct 31) profit, aided by higher volume and pricing and a positive impact from the acquisition of Webster Industries.

The company's profit for the year zoomed 87% year over year to $23.2 million. Earnings per share of $4.16 nearly doubled from $2.09 recorded a year ago. That, however, fell shy of the Zacks Consensus Estimate of $4.40.   

Net sales for the year jumped 18% year over year to $1,152.5 million, driven by a 5% increase in sales volumes and a 1% increase in average selling prices. Webster acquisition contributed $114.3 million. Sales, however, trailed the Zacks Consensus Estimate of $1,154 million.

Gross profit surged 42% to $182.7 million, primarily driven by increased sales volumes and improved material margins. Gross margin expanded to 15.9% from 13.2% in fiscal 2011.

Operating expenses climbed 23% year over year to $126.8 million due to higher spending by Webster, a rise in selling and delivery costs stemming from an increase in volumes sold, an increase in share-based compensation expenses and higher provisions associated with employee cash performance incentives.

AEP Industries feels that Webster acquisition coupled with the recent purchase of films business from Transco Plastic Industries will boost its product offerings and enhance its manufacturing capabilities. Despite the uncertain economic environment, the company is hopeful to continue its strong performance in fiscal 2013.

AEP Industries is a manufacturer of plastic packaging products in North America. The company makes and distributes an array of polyethylene, polyvinyl chloride and polypropylene flexible packaging products for consumer, industrial and agricultural applications. AEP Industries has manufacturing facilities in the U.S. and Canada and markets its products directly as well as through distributors to end-users.

Bemis Company, Inc. ( BMS ), which also makes packaging films, will report its fourth quarter and full-year 2012 results on Jan 31.

AEP Industries currently retains a short-term Zacks Rank #3 (Hold).

Other companies in the containers and packaging industry with favorable Zacks Rank are Graphic Packaging Holding ( GPK ) with a Zacks Rank #1 (Strong Buy), UFP Technologies ( UFPT ) with a Zacks Rank #2 (Buy).

AEP INDS (AEPI): Free Stock Analysis Report

BEMIS (BMS): Free Stock Analysis Report

GRAPHIC PKG HLD (GPK): Free Stock Analysis Report

UFP TECH INC (UFPT): Free Stock Analysis Report

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