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Greif Cuts 2012 EBITDA Outlook - Analyst Blog
8/17/2012 4:22:00 PM
Greif, Inc. ( GEF ) has revised its fiscal 2012 (ending October 31, 2012) guidance citing weaker volumes and a slower-than-anticipated recovery in the European market during the third quarter. The company now estimates EBITDA (earnings before interest, taxes, depreciation and amortization) to be in the range of $445 million - $465 million, down from the previous guidance of $500 million - $525 million.
The company had reported EBITDA (before special items) of $526.6
million in fiscal 2011. Including special items, EBITDA stood at
$467.2 million last year.
In the Rigid Industrial Packaging & Services, net sales
increased 8% to $802.9 million for the second quarter 2012,
benefiting from a 12% increment from acquisitions that helped
offset a 5% decline in sales volumes owing to economic conditions
and market pressure, mainly in Europe. In the Flexible Products
& Services segment, sales declined 16% to $113.9 million due to
lower sales volumes, hurt by weak market conditions in Europe.
It seems that rigid packaging markets in other regions across
the globe are being impacted. The company notes that the geographic
mix of earnings will lead to a higher book tax rate for third
quarter 2012 compared to its previous expectation.
Delaware, Ohio-based Greif manufactures and sells industrial packaging products, bulk containers, and containerboard and corrugated products worldwide. The company provides services such as blending, filling, packaging and recycling of industrial containers for a wide range of industries.
Greif also manages timber properties in North America and provides land management consulting services. Greif competes with Longview Fibre Company, RockTenn CP, LLC and Temple-Inland Inc. The stock retains a quantitative Zacks #5 Rank (short term Strong Sell rating) over the near term.
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