Bemis Company, Inc. Earnings Cheat Sheet: Shrinking Margins for Fifth Consecutive Quarter, Net Income Falls

S&P 500 (NYSE:SPY) component Bemis Company, Inc. (NYSE:BMS) reported its results for the second quarter. Bemis Company, Inc. is a manufacturer of flexible packaging products and pressure-sensitive materials for customers worldwide.

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Bemis Company Earnings Cheat Sheet for the Second Quarter

Results: Net income for the packaging and containers company fell to $55.6 million (51 cents per share) vs. $59.6 million (54 cents per share) a year earlier. This is a decline of 6.8% from the year earlier quarter.

Revenue: Rose 7.9% to $1.37 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: BMS reported adjusted net income of 58 cents per share. By that measure, the company beat the mean estimate of 50 cents per share. Analysts were expecting revenue of $1.37 billion.

Quoting Management: “Results for the second quarter of 2011 were in line with our expectations,” said Henry Theisen, Bemis Company’s President and Chief Executive Officer. “Profit margins were lower this quarter as a result of raw material cost inflation that continued through the month of May. While North American sales volumes have been keeping pace with the levels of 2010, we continue to be cautious about expectations for the second half of 2011 in light of inflationary pressures on our operating margins and consumer spending levels.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the first quarter, net income rose 66.4% from the year earlier, while the figure increased more than twofold in the fourth quarter of the last fiscal year, 71.4% in the third quarter of the last fiscal year and 22.9% in the second quarter of the last fiscal year.

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 1.1 percentage points to 17.1% from the year earlier quarter. Over that time, margins have contracted on average 1.4 percentage points per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 29.6% to $1.32 billion in the first quarter. The figure rose 37.8% in the fourth quarter of the last fiscal year from the year earlier and climbed 44% in the third quarter of the last fiscal year from the year-ago quarter.

The company beat estimates last quarter after falling short in the previous two quarters. In the first quarter, it missed the mark by 5 cents, and in the fourth quarter of the last fiscal year, it fell short by 2 cents.

Competitors to Watch: Sonoco Products Company (NYSE:SON), Sealed Air Corp. (NYSE:SEE), Rock-Tenn Company (NYSE:RKT), AptarGroup, Inc. (NYSE:ATR), Amcor Limited (AMCRY), and Can Tho Sadico Joint Stock Corp (NYSE:SDG).

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(Source: Xignite Financials)

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