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Bemis (BMS) Earnings In Line, Sales Beat Estimates in Q4

Bemis Company, Inc.BMS has reported fourth-quarter 2018 adjusted earnings per share of 71 cents, which improved 13% year over year. Earnings were in line with the Zacks Consensus Estimate.

Including one-time costs, Bemis reported earnings of 70 cents per share against a loss of 44 cents in the prior-year quarter.

Operational Update

Net sales edged down 0.07% to $1,002.8 million from $1,003.6 million recorded in the year-ago quarter. The reported figure comfortably beat the Zacks Consensus Estimate of $980 million.

Cost of products sold declined 0.9% year over year to $802 million in the fourth quarter. Gross profit rose 3% year over year to $200 million. Gross margin came in at 20% during the fourth quarter compared with 19.3% recorded in the year-ago quarter.

Selling, general and administrative expenses declined 1.5% to $93.3 million from the year-earlier quarter. Adjusted operating income increased 6.2% year over year to $102.8 million.

Bemis Company, Inc. Price, Consensus and EPS Surprise

Bemis Company, Inc. Price, Consensus and EPS Surprise | Bemis Company, Inc. Quote

Segmental Performance

Net sales in the U.S. Packaging segment climbed 2.7% year over year to $660.4 million. However, the segment's operating profit inched up 0.4% to $89.7 million from $89.3 million in the prior-year quarter.

Net sales in the Latin America Packaging segment declined around 14.7% year over year to $152.4 million. However, the segment's operating profit improved to $7.8 million from $6.2 million recorded in the year-ago quarter.

Net sales in the Rest of World Packaging segment increased 4.6% year over year to $190 million. This segment's operating profit jumped 55% to $23.8 million from $15.4 million in the prior-year quarter.

Financial Update

Bemis reported cash and cash equivalents of $76.1 million at the end of the fourth quarter, up from $71 million recorded at the end of fourth-quarter 2017. Cash flow from operations was $462 million for the 12-month period ended Dec 31, 2018, compared with $379 million recorded in the last year.

Bemis' net debt decreased to $1.28 billion as of Dec 31, 2018, from $1.49 billion as of Dec 31, 2017.

Agility Plan

Bemis launched an improvement plan called "Agility" in 2017 to fix, strengthen and grow its business. As part of this three-pronged approach, the "fix" aspect involves restructuring and cost-saving plan target of $65 million pre-tax by the end of 2019. Agility-related savings were approximately $9 million during the December-end quarter, in line with the company's expectations.

Bemis & Amcor Merger

In August 2018, Amcor and Bemis announced the plan to merge their operations in a $6.8-billion all-stock transaction. The merger will create a global leader in consumer packaging. Bemis' shareholders will benefit from the expected increase in dividend, which nearly doubled from the current dividend rate. This merger will provide $180 million of cost synergies identified as part of the transaction. The company remains on track to close the deal in first-quarter 2019.

2018 Results

Bemis reported adjusted earnings per share of $2.79 in 2018, up 16.7% from $2.39 in the prior year. Earnings came in line with the Zacks Consensus Estimate.

Sales increased 1% year over year to $4.09 billion from $4.05 billion in 2017. The top line beat the Zacks Consensus Estimate of $4.07 billion.

Share Price Performance

Bemis' shares have outperformed its industry with respect to price performance in the past year. The stock gained 6.3% against the industry's decline of 12.5%.

Zacks Rank & Other Key Picks

The company currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the Industrial Products sector are Axon Enterprise, Inc AAXN , Alarm.com Holdings, Inc. ALRM and EnerSys ENS . While Axon and Alarm.com currently flaunt a Zacks Rank #1 (Strong Buy), EnerSys carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Axon has an expected earnings growth rate of 14.5% for 2019. The company's shares have rallied 97.6% in the past year.

Alarm.com has an expected earnings growth rate of 7.8% for 2019. The stock has climbed 72.1% in a year's time.

EnerSys has an expected earnings growth rate of 9.5% for 2019. Its shares have gained 22.6% in the past year.

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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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