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. Quote
Greif’s Sales Rise in Q4 on Higher Volumes
GEF’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 Q4
Greif 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 Q4
Sales 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 FY24
Greif 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 Estimates
Adjusted 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 Outlook
Reflecting 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 Moves
Greif 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 Rank
Image Source: Zacks Investment Research
The 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 Peers
Packaging 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 Double
Each 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 >>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 Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
