Amcor (AMCR) to Report Q2 Earnings: What's in the Offing?

Amcor Plc AMCR is scheduled to report second-quarter fiscal 2022 results on Feb 1, after the closing bell.

Q2 Estimates

The Zacks Consensus Estimate for the fiscal second-quarter revenues is pegged at $3.35 billion, indicating growth of 7.8% from the prior-year quarter. The consensus mark for quarterly earnings currently stands at 18 cents, suggesting year-over-year in-line performance. The estimate has remained unchanged over the past 30 days.

Q1 Performance

Amcor delivered year-over-year improvement in both earnings and revenues in the first quarter of fiscal 2022. While revenues beat the Zacks Consensus Estimate, earnings came in line. The company has a trailing four-quarter earnings surprise of 1.2%, on average.

Amcor PLC Price and EPS Surprise

Amcor PLC price-eps-surprise | Amcor PLC Quote

Key Factors to Note

Amcor’s sales have been benefiting from the stay-at-home trend due to the pandemic and the trend is likely to have continued in the fourth quarter due to increasing concerns over the emerging variants of the COVID-19 virus. Both the Rigid Packaging and Flexible Packaging segments have been performing well through a combination of organic growth and disciplined cost control. The Flexibles segment has been consistently witnessing solid growth across a broad range of end markets, including higher-value end markets like protein, coffee, cheese and pet food.

The Rigid packaging segment has been seeing strong consumer demand. In North America, beverage volumes and hot fill container volumes have been gaining on robust consumer demand reflecting higher-at-home consumption of packaged beverages. Brand extensions, and the introduction of new health and wellness oriented products in PET containers have been contributing to growth as well. Specialty container volumes have been benefiting from growth in certain categories including spirits, personal care and home cleaning. These factors might get reflected in Amcor’s second-quarter fiscal 2022 top line. The same may have helped the Flexibles segment negate the impact of lower volumes from certain healthcare end markets. Fewer elective surgeries and lower prescription trends on account of the COVID-19 pandemic may have weighed on volumes.

Amcor’s acquisition of Bemis Company in June 2019 expanded its global footprint, opened up new attractive end markets and customers for the company’s products, and greater economies of scale, thus driving efficiencies and higher margins. The integration has been essentially completed and the company has realized cost synergies of $75 million in fiscal 2021. Amcor anticipates exceeding the original target of $180 million by the end of fiscal 2022 by at least 10%. These synergies might have favored the to-be-reported quarter’s margin performance.

However, this benefit might have been offset by higher raw material, chemical labor and transportation costs. The company has been witnessing raw material price volatility due to supply shortages of certain resins and raw materials, which might have marred its quarterly performance.

What the Zacks Model Indicates

Our proven model doesn’t conclusively predict an earnings beat for Amcor this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Amcor is 0.00%.

Zacks Rank: Amcor currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Price Performance

Image Source: Zacks Investment Research

Over the past six months, shares of Amcor have gained 5.5% against the industry’s growth of 10.6%.

Stocks Poised to Beat Earnings Estimates

Here are some Industrial Products stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Sealed Air Corporation SEE currently has an Earnings ESP of +1.75% and a Zacks Rank of 2. The Zacks Consensus Estimate for the company’s earnings for the fourth quarter of 2021 indicates year-over-year growth of 28.1%.

Sealed Air’s shares have gained 53% over the past year. SEE’s earnings topped the consensus mark in three of the trailing four quarters and missed once, the average surprise being 6.5%.

Ingersoll Rand IR has an Earnings ESP of +7.44% and a Zacks Rank #3. The Zacks Consensus Estimate for earnings for the fourth quarter of 2021 suggests year-over-year growth of 15%.

Shares of Ingersoll Rand have gained 28% over the past year. IR earnings surpassed the consensus mark in each of the trailing four quarters, the average surprise being 19.8%.

Crown Holdings CCK has an Earnings ESP of +0.08% and a Zacks Rank #3. The Zacks Consensus Estimate for the company’s earnings for the fourth quarter of 2021 indicates year-over-year growth of 2.7%.

Shares of Crown Holdings have gained 25% over the past year. CCK’s earnings beat estimates in each of the trailing four quarters, the average surprise being 17.4%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

 

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.