Silgan Holdings (SLGN) to Post Q2 Earnings: What's in Store?

Silgan Holdings Inc. SLGN is scheduled to report second-quarter 2020 results on Jul 22, before the market opens.

Q1 Results

The company reported better-than-expected results in the first quarter of 2020. Both revenue and earnings beat the Zacks Consensus Estimate and improved year over year.

Q2 Estimates

The Zacks Consensus Estimate for Silgan Holdings’ second-quarter total sales is pegged at $1.12 billion, indicating an improvement of 2% from the year-ago reported figure. The consensus mark for earnings currently stands at 63 cents, suggesting growth of 14.6% from the prior-year quarter. The estimate has remained stable over the past 30 days.

The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters, while coming in-line in the remaining two. Silgan Holdings has a trailing four-quarter earnings surprise of 4.55%, on average.

Silgan Holdings Inc. Price and EPS Surprise

Silgan Holdings Inc. Price and EPS Surprise

Silgan Holdings Inc. price-eps-surprise | Silgan Holdings Inc. Quote

Factors to Note

Silgan Holdings’ business has been declared essential in all the geographies in which it operates. Given the surge in demand for vital products like food, beverage and consumer health and personal care products amid the coronavirus crisis, the company has been witnessing strong volumes across all of its segments. Notably, all of its global production facilities have remained open, with many setting production records. Silgan Holdings’ order books are full, which is likely to get reflected in the second-quarter results. The company also might have gained from the ongoing momentum in demand for food and consumer health products, such as soap and sanitizer bottles and dispensing systems.

Meanwhile, certain products generally not intended for stay-at-home use, such as gallon, food cans for restaurants, sports drinks have witnessed volume declines amid the pandemic. Further, weakness in certain beauty products due to shift in consumers’ buying patterns has also been a deterring factor. These factors may have somewhat negated the abovementioned gains.

Silgan Holdings continually evaluates cost reduction opportunities across each of its businesses, including rationalizations of existing facilities through plant closures and downsizings. These actions might have benefited the company’s second-quarter performance.

Q2 Segment Expectations

The Zacks Consensus Estimate for the Closures segment’s revenues is pegged at $384 million, indicating an improvement of 7% from the prior-year quarter. The segment is expected to report an operating profit of $53 million, up from $47 million witnessed in the year-earlier quarter.

The Metal Food Container segment is expected to record revenues of $571 million compared with $576 million generated in the year-ago period. The segment is projected to report an operating profit of $62 million, reflecting significant growth from the $14 million in the prior-year quarter.

The Zacks Consensus Estimate for the Plastic Container segment’s revenues is currently pegged at $159 million compared with the year-earlier quarter’s $154 million. The estimate for the segment’s operating profit for the second quarter is currently pegged at $17 million, indicating an improvement of 29% from $13 million reported in year-ago quarter.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for Silgan Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances 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.

Zacks ESP: The Earnings ESP for Silgan Holdings is 0.00%.

Zacks Rank: Silgan Holdings currently carries a Zacks Rank #3.

Price Performance

In a year’s time, shares of Silgan Holdings have gained 15.7%, compared with the industry’s growth of 3%.

Stocks to Consider

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

Allegion plc ALLE has an Earnings ESP of +2.27% and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lincoln Electric Holdings, Inc. LECO currently has a Zacks Rank #2 and an Earnings ESP of +5.50%.

W.W. Grainger, Inc. GWW, a Zacks #3 Ranked stock, has an Earnings ESP of +13.76%.

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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.

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