Upcoming AWS Coverage on Sonoco Products Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 2, 2017 / Active Wall St. announces its post-earnings coverage on Sealed Air Corp. (NYSE: SEE). The Company reported its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year 2016 (FY16) on February 09, 2017. The Packaging Company's earnings numbers surpassed market expectations. Register with us now for your free membership at:

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One of Sealed Air's competitors within the Packaging & Containers space, Sonoco Products Co. (NYSE: SON), reported on February 09, 2017, its financial results for Q4 and full-year 2016. AWS will be initiating a research report on Sonoco Products in the coming days.

Today, AWS is promoting its earnings coverage on SEE; touching on SON. Get our free coverage by signing up to:

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Earnings Reviewed

In Q4 FY16, Sealed Air reported net sales of $1.74 billion, which was below the $1.75 billion recorded at the end of Q4 FY15. Currency had a negative impact on the Company's total net sales of 2.3%, or $40 million, and the Food Care divestitures had a negative impact on total sales of 0.3%, or $5 million, in Q4 FY16. The Company's revenue numbers came in below market estimates of $1.78 million.

For Q4 FY16, Sealed Air reported net income of $171 million, or $0.87 per diluted share, compared to $123 million, or $0.62 per diluted share, in Q4 FY15. The Company stated that net income in the reported quarter was favorably impacted by $22 million of Special Items, primarily related to the release of certain tax reserves. Adjusted for non-recurring gains, the Company's earnings were $0.76 per share, beating Wall Street's estimates of $0.75 per share.

In FY16, Company's net sales came in at $6.78 billion, down from $7.03 billion in the year ago same period. Furthermore, net income for FY16 stood at $486 million, or $2.46 per diluted share, compared to $335 million, or $1.62 per diluted share, in FY15.

Operating Metrics

For the three months ended on December 31, 2016, the Company posted gross profit of $640.9 million, or 36.7% of net sales, compared to $636.6 million, or 36.3% of net sales, in the prior year's same quarter. The Company's operating income for Q4 FY16 came in at $204.0 million versus $196.6 million in Q4 FY15.

Segment Performance

During Q4 FY16, Sealed Air's Food Care segment's net sales came in at $841 million, flat on a year-on-year basis. Currency had a negative impact on Food Care net sales of 2.3%, or $20 million, and divestitures had a negative impact of 0.6%, or $5 million. On an organic basis, the segment's net sales increased 2.7% due to positive volume of 2.0% and favorable price/mix of 0.7%. Food Care segment's adjusted EBITDA margins of 21.2% expanded 250 basis points compared to last year.

For Q4 FY16, Sealed Air's Diversey Care division reported net sales of $493 million, down 0.4% as reported and increased 2.8% on a constant dollar basis. Currency had a negative impact on Diversey Care's net sales of 3.2%, or $16 million, in the reported quarter. Price/mix and volume increased 2.4% and 0.4%, respectively. The segment's adjusted EBITDA margins improved 180 basis points compared to Q4 FY15.

Sealed Air's Product Care's net sales totaled $394 million in Q4 FY16, down 1.7% on as reported and 0.5% on a constant dollar basis. Currency had a negative impact on Product Care's net sales of 1.2%, or $5 million. The segment's sales volume increased 1.5%, which was offset by unfavorable price/mix of 2.0%. Product Care's adjusted EBITDA margins expanded 80 basis points compared to the same period a year ago due to higher volumes, which were partially offset by negative price spread.

Separation of New Diversey

In mid-October, Sealed Air announced plans to pursue a tax-free spin-off of New Diversey. The Company is also exploring the strategic alternatives restricts the ability to repurchase shares under the current share buyback program. Once the separation process is concluded, Sealed Air intends to resume share repurchases.

Cash Flow and Balance Sheet

Sealed Air reported that cash flow provided by operating activities in FY16 was $907 million compared to cash provided by operating activities of $982 million in FY15. The Company had cash and cash equivalents balance of $363.7 million as on December 31, 2016, compared to $351.7 million, at the close of books on December 31, 2015. During FY16, the Company repurchased approximately $4.7 million shares for approximately $217 million, and paid cash dividends of $122 million.

Outlook

For FY17, Sealed Air estimates net sales to be essentially unchanged with FY16 as reported results, which assumes an unfavorable impact of approximately 3% from foreign currency translation. Adjusted for unfavorable currency, net sales are expected to increase approximately 2.5% in FY17. The Company is forecasting adjusted EPS to be approximately $2.70 per share, which assumes approximately $0.14 per share of unfavorable currency translation. The Company estimates adjusted tax rate of 23% and $197 million diluted shares outstanding. The Company anticipates FY17 free cash flow to be approximately $600 million, including capital expenditures of approximately $185 million, and cash restructuring payments in the range of $85 million to $100 million.

Stock Performance

On March 01, 2017, Sealed Air's share price finished the trading session at $47.12, rising 1.38%. A total volume of 2.23 million shares exchanged hands, which was higher than the 3 months average volume of 1.66 million shares. The stock has advanced 0.73% and 2.98% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have gained 3.93%. The stock is trading at a PE ratio of 19.19 and has a dividend yield of 1.36%.

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SOURCE: Active Wall Street