Graphic Packaging Holding Earnings: Here’s Why Investors are Not Happy Now

Graphic Packaging Holding Company (NYSE:GPK) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 3.84%.

Graphic Packaging Holding Company Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 18.18% to $0.13 in the quarter versus EPS of $0.11 in the year-earlier quarter.

Revenue: Rose 2.5% to $1.14 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Graphic Packaging Holding Company reported adjusted EPS income of $0.13 per share. By that measure, the company missed the mean analyst estimate of $0.13. It missed the average revenue estimate of $1.17 billion.

Quoting Management: “Our second quarter results were in line with our expectations in a tough operating environment,” said CEO David Scheible. “Strong operating performance offset lower pricing and sluggish demand, particularly in our beverage folding carton business. Volumes in both beer and soft drink were undoubtedly impacted by cooler and wetter than normal weather during the Memorial Day weekend through the end of June. At the same time, year over year pricing was down about $16 million, mostly due to contractual resets related to 2012 commodity input deflation. We were able to offset these headwinds by delivering $29 million of benefit from improved operating performance and cost reductions, which keeps us on track to achieve our full year savings target of $100-$120 million.”

Key Stats (on next page)…

Revenue increased 3.56% from $1.1 billion in the previous quarter. EPS increased 30% from $0.10 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.14 and has not changed. For the current year, the average estimate is a profit of $0.49, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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