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AptarGroup (ATR) Beats on Q4 Earnings; Revenues Down Y/Y

AptarGroup, Inc.ATR reported fourth-quarter 2016 earnings per share of 69 cents, up 6% year over year. Earnings also beat the Zacks Consensus Estimate of 66 cents. Earnings came above the company's guidance range of 63-68 cents per share. On a reported basis, earnings per share increased 13% to 77 cents from 68 cents in the prior-year quarter.

Operational Update

Total revenue was down 1% year over year to $539 million in the reported quarter, falling short of the Zacks Consensus Estimate of $559 million. Excluding the negative impact from changes in currency exchange rates and the positive impact from acquisitions, core sales decreased by 2%.

Cost of sales declined to $353 million from $360 million in the year-ago quarter. Gross profit remained flat at $186 million with gross margin expanding 50 basis points (bps) to 34.5%. Selling, research, development and administrative expenses went down 3.4% year over year to $81.7 million. Adjusted operating income inched up 0.3% year over year to $69 million. AptarGroup's operating margin expanded 20 bps year over year to 12.8%.

AptarGroup, Inc. Price, Consensus and EPS Surprise

AptarGroup, Inc. Price, Consensus and EPS Surprise | AptarGroup, Inc. Quote

Segmental Performance

Total revenue in the Beauty and Homes segment dipped 4% year over year to $290.4 million. Operating income increased 4.6% to $21 million from $20 million in the year-ago quarter.

Total revenue in the Pharma segment went up 0.7% year over year to $176 million. Operating income grew 4% year over year to $52 million in the quarter.

Total revenue in the Food and Beverage segment climbed 4.6% year over year to $72.4 million. Operating income declined 13% year over year to $4.7 million.

Financial Performance

AptarGroup reported cash and cash equivalents of $466 million at the end of 2016, down from $490 million as of Dec 31, 2015. At 2016 end, long-term debt was approximately $772 million, down from $761 million as of Dec 31, 2015.

2016 Performance

AptarGroup posted earnings of $3.13 per share for 2016, up 5% year over year. Earnings beat the Zacks Consensus Estimate $3.10. Revenues for full-year 2016 went up 1% year over year to $2.33 billion from $2.32 billion in 2015. Revenues fell short of the Zacks Consensus Estimate of $2.35 billion.

Outlook

For first-quarter 2017, AptarGroup expects earnings to be in the range of 72-77 cents. This excludes any potential effects of the timing of costs incurred and any related insurance reimbursements associated with the Aptar Annecy facility fire. Comparable earnings per share for the prior year were approximately 74 cents.

Share Price Performance

In the last one year, AptarGroup has underperformed the Zacks classified Containers-Paper/Plastic sub-industry with respect to price performance. The stock lost around 1.1%, while the industry rose 32.8% over the same time frame.

Zacks Rank& Key Picks

AptarGroup currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the same sector are Kennametal Inc. KMT , Altra Industrial Motion Corp. AIMC and Apogee Enterprises, Inc. APOG .

Kennametal has delivered an average positive earnings surprise of 9.90% in the last four quarters. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Altra Industrial Motion also boasts a Zacks Rank #1 and has delivered an average positive earnings surprise of 8.06% for the trailing four quarters. Apogee, another Zacks Rank #1 stock, has an average positive earnings surprise of 13.24% for the past four quarters.

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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.


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

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