Bemis Company Inc. Earnings: Margins Keep Shrinking as Net Income Drops

S&P 500 (NYSE:SPY) component Bemis Company Inc. (NYSE:BMS) reported its results for the fourth quarter. Bemis Company 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 Fourth Quarter

Results: Net income for the packaging and containers company fell to $20.1 million (19 cents per share) vs. $53.3 million (48 cents per share) a year earlier. This is a decline of 62.3% from the year earlier quarter.

Revenue: Rose 1.7% to $1.27 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: BMS reported adjusted net income of 45 cents per share. By that measure, the company beat the mean estimate of 39 cents per share. Analysts were expecting revenue of $1.27 billion.

Quoting Management: “We faced a challenging environment in 2011, as dramatic resin price increases and softening customer demand impacted our performance throughout the year,” said Henry Theisen, Bemis Company’s President and Chief Executive Officer. “As we enter 2012, we are making changes to our manufacturing footprint in order to meaningfully reduce expenses and create positive profit momentum going forward.”

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 1.5 percentage points to 17% from the year earlier quarter. Over that time, margins have contracted on average 1.3 percentage points per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 4.9% to $1.36 billion in the third quarter. The figure rose 7.9% in the second quarter from the year earlier and climbed 29.6% in the first quarter from the year-ago quarter.

The company has now seen net income fall in each of the last three quarters. In the third quarter, net income fell 9.1% from the year earlier, while the figure fell 9% in the second quarter.

The company topped expectations last quarter after falling short of forecasts in the third quarter with net income of 56 cents versus a mean estimate of net income of 58 cents per share.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the first quarter of the next fiscal year is 49 cents per share, down from 57 cents ninety days ago. At $1.92 per share, the average estimate for the fiscal year has fallen from $2.10 ninety days ago.

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

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com