Greif Q4 Earnings Beat Estimates, Margins Decline on Elevated Costs

Greif, Inc. GEF reported adjusted earnings per share (EPS) of $1.13 for fourth-quarter fiscal 2024 (ended Oct. 31, 2024), which surpassed the Zacks Consensus Estimate of $1.08. GEF’s bottom line declined 29% year over year as higher input and labor costs as well as selling, general and administrative expenses offset the gain from improved sales.Including one-time items, Greif’s EPS was $1.08 compared with $1.16 in the prior-year quarter.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Greif, Inc. Stock Price, Consensus and EPS Surprise Greif, Inc. price-consensus-eps-surprise-chart | Greif, Inc. QuoteGreif’s Sales Rise in Q4 on Higher VolumesGEF’s sales increased 8% year over year to $1.42 billion . The top line surpassed the Zacks Consensus Estimate of $1.41 billion.The year-over-year improvement was attributed to higher volumes in the Global Industrial Packaging segment, increased average selling prices in the Paper Packaging & Services segment and gains from recent acquisitions.Higher Costs Hurt GEF’s Margins in Q4Greif witnessed a 9.3% rise in the cost of sales to $1.13 billion due to higher raw material, labor and manufacturing costs. Gross profit amounted to around $289 million, up 4.7% from the prior-year quarter. The gross margin was 20.4% in the fiscal fourth quarter , a 70-basis point contraction year over year.SG&A expenses were $157.5 million, 15% higher than the prior-year quarter’s figure. Adjusted EBITDA dipped 2% year over year to $197.6 million in the fiscal fourth quarter. Adjusted EBITDA margin was 13.9% compared with 15.4% in the year-ago quarter.Greif’s Segment Performance in Q4Sales in the Global Industrial Packaging segment were $787 million, 9% higher than the prior-year quarter aided by increased volumes (3.7%) and contributions from recent acquisitions. Our model projected revenues of $772 million for the quarter.The segment’s adjusted EBITDA amounted to $109 million compared with the year-ago quarter’s $105 million. The 4% year-over-year improvement was due to higher sales, partially offset by an increase in raw material, labor and manufacturing costs as well as higher SG&A expenses. The reported figure missed our estimate of $127 million.The Paper Packaging segment’s sales improved 7% year over year to $624 million in the fiscal fourth quarter owing to higher selling prices (5%). The figure matched our sales estimate.The segment’s adjusted EBITDA declined 9% to $85 million from the prior-year quarter’s $94 million, due to higher raw material, labor costs as well as SG&A expenses. We projected the segment’s adjusted EBITDA to be $70 million.The Land Management segment’s sales totaled $5.7 million , in line with our estimate. The segment reported sales of $5.8 million in the year-ago quarter. Adjusted EBITDA was $2.9 million compared with the year-earlier quarter’s $2.5 million. Our projection for the quarter’s adjusted EBITDA was $4.9 million.GEF’s Cash & Debt Position for FY24Greif reported cash and cash equivalents of $198 million at the end of fiscal 2024 compared with $181 million at the end of fiscal 2023. Cash flow from operating activities totaled $356 million in fiscal 2024, marking a substantial decline from $650 million in fiscal 2023.Greif’s long-term debt was $2.63 billion as of fiscal 2024 end compared with $2.12 billion as of the end of fiscal 2023.On Tuesday, Greif’s board announced a quarterly cash dividend of 54 cents per share of Class A Common Stock and 80 cents per share of Class B Common Stock. The dividends will be paid out on Jan. 1, 2025, to shareholders of record at the close of business as of Dec. 16, 2024.Greif’s Fiscal 2024 EPS & Revenues Beat EstimatesAdjusted EPS plunged 30% year over year to $4.31 in fiscal 2024 but beat the Zacks Consensus Estimate of $4.20. Including one-time items, EPS was $4.52 compared with $6.15 in the prior fiscal.Greif reported sales of $5.45 billion, which beat the consensus estimate of $5.44 billion. Sales were up 4.4% from the prior fiscal.GEF’s FY25 OutlookReflecting the ongoing contraction in the industrial sector, Greif provided the low end of guidance. The company’s low end of adjusted EBITDA guidance is around $675 million. The low end of adjusted free cash flow guidance is $225 million.Greif’s Recent Strategic MovesGreif has completed its  business model optimization project and will report through four new reportable segments beginning in the first quarter of 2025 — Customized Polymer Solutions; Durable Metal Solutions; Sustainable Fiber Solutions; and Integrated Solutions.Greif has also announced cost optimization efforts that will eliminate $100 million of structural costs from the business. This will be achieved through a combination of SG&A rationalization, network optimization and operating efficiency gain.GEF Stock Price Performance & Zacks RankImage Source: Zacks Investment ResearchThe company’s shares have gained 1.8% in the past year compared with the industry’s 24.3% growth.Greif currently carries a Zacks Rank #4 (Sell).Recent Earnings Performances of GEF’s PeersPackaging Corporation of America PKG posted adjusted EPS of $2.65 in the third quarter of 2024, which beat the Zacks Consensus Estimate of earnings of $2.48. The bottom line was higher than the company’s earnings guidance of $2.45 per share and grew 29% year over year.Sales rose 12.6% year over year to $2.18 billion due to higher volumes. The top line beat the Zacks Consensus Estimate of $2.09 billion. PKG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.Sealed Air Corporation SEE reported third-quarter 2024 adjusted EPS of 79 cents, which surpassed the Zacks Consensus Estimate of 66 cents by a margin of 19.7%. The bottom line increased 2.6% year over year.SEE’s total revenues were $1.35 billion, which beat the consensus estimate of $1.34 billion. The figure was down 2.7% year over year. Sealed Air currently carries a Zacks Rank #3. (Hold).Amcor Plc AMCR reported first-quarter fiscal 2025 (ended Sept. 30, 2024) adjusted EPS of 16 cents, which met the Zacks Consensus Estimate. The bottom line grew 4% from the year-ago quarter.AMCR’s total revenues fell 2.6% year over year to $3.35 billion. The downside was due to a 1% unfavorable impact of foreign exchange and a 1% impact of pass-through of lower raw material costs. The price/mix had impacts of around 3% on sales. Volume rose 2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.57 billion. AMCR currently carries a Zacks Rank of 3.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sealed Air Corporation (SEE): Free Stock Analysis Report Packaging Corporation of America (PKG): Free Stock Analysis Report Greif, Inc. (GEF): Free Stock Analysis Report Amcor PLC (AMCR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks