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AptarGroup Tops Q4 Earnings, Shares Down on Revenue Fall

AptarGroup, Inc.ATR reported record fourth-quarter 2015 earnings per share of 67 cents, which improved 18% year over year from 57 cents per share. Earnings surpassed the company's guidance range of 61 cents to 66 cents and also came in ahead of the Zacks Consensus Estimate of 64 cents. Despite record earnings, AptarGroup's share price declined 3% since it reported results on Feb 4 due to the top-line decline.

On a reported basis, earnings per share increased roughly 8% to 68 cents from 63 cents in the prior-year quarter.

Aptargroup Inc. (ATR) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

Operational Update

Total revenues declined 9% year over year to $547 million in the reported quarter. Revenues also missed the Zacks Consensus Estimate of $555 million. Core sales, which exclude currency translation effects, increased approximately 1% year over year in the quarter.

Cost of sales declined 12% year over year to $359 million. Selling, research, development and administrative expenses went down 5% year over year to $84.6 million. Operating income increased 4% year over year to $67 million. AptarGroup's operating margin increased a significant 150 basis points (bps) year over year to 12%. Strong operating results across each business segment led to solid operating margins.

Segmental Performance

Total revenues in the Beauty + Homes segment decreased 12% year over year to $303 million. However, operating income increased 12% to $20 million from $18 million in the year-ago quarter.

Total revenues in the Pharma segment fell 4% year over year to $175 million. Operating income remained flat at $50 million in the quarter.

Total revenue in the Food + Beverage segment went down 7% year over year to $69 million. Operating income improved 21% year over year to $5.4 million.

Financial Performance

Cash and cash equivalents were $490 million at the end of 2015 compared with $400 million as of Dec 31, 2014. AptarGroup's long-term debt increased to $762 million as of Dec 31, 2015 from $589 million as of Dec 31, 2014.

Full Year Performance

AptarGroup reported earnings per share of $3.00 in 2015, up 21% from $2.48 in 2014. Earnings beat the Zacks Consensus Estimate by a penny. Revenues declined 11% year over year to $2.317 billion, short of the Zacks Consensus Estimate of $2.325 billion. Core sales increased by approximately 1%.

Outlook

AptarGroup does not expect a material improvement in the various macro challenges that the company is currently witnessing. Unfavorable foreign currency is expected to negatively impact its results. Meanwhile, the company will continue to focus on reducing costs and still invest in innovation and new solutions designed to help its customers grow their businesses.

For the first quarter, AptarGroup expects earnings per share, excluding impacts from costs associated with the Mega Airless acquisition, to be in the range of 69 to 74 cents per share.

Crystal Lake, IL-based AptarGroup is a leading global supplier of a wide range of innovative dispensing systems for the fragrance/cosmetic, personal care, pharmaceutical, household and food/beverage markets.

At present, AptarGroup has a Zacks Rank #3 (Hold). Some better-ranked industrial product stocks include Albany International Corp. AIN , Mobile Mini, Inc. MINI and Codexis, Inc. CDXS . All three stocks carry a Zacks Rank #2 (Buy).

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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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