Sealed Air Corp Earnings: Two Straight Quarters of Profit Broken by a Loss

Increasing costs did not help S&P 500 (NYSE:SPY) component Sealed Air Corporation (NYSE:SEE) in the fourth quarter as the company reversed to a loss. Sealed Air, through its subsidiaries, is a global manufacturer of a variety of packaging materials and equipment systems. Its product brands include Bubble Wrap and Instapak. These offerings are used in a range of food, industrial, medical and consumer applications.

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Sealed Air Earnings Cheat Sheet for the Fourth Quarter

Results: Reported a loss of $49.3 million (26 cents per diluted share) in the quarter. The packaging and containers company had net income of $51.3 million or 29 cents per share in the year earlier quarter.

Revenue: Rose 69.8% to $2.05 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: Sealed Air Corporation reported adjusted net income of 8 cents per share. By that measure, the company fell short of mean estimate of 50 cents per share. It beat the average revenue estimate of $1.29 billion.

Quoting Management: Commenting on our operating performance, William V. Hickey, President and Chief Executive Officer, stated: “Our results for the fourth quarter reflect solid performance in our legacy Sealed Air business in a challenging economic environment, coupled with the successful completion of our Diversey acquisition. In the legacy businesses, our continued focus on our strategic growth programs, developing region expansion and margin improvement helped to drive improved free cash flow above expectations, strengthening our ability to pay down debt and drive earnings growth going forward.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased 10.4% to $1.25 billion in the third quarter. The figure rose 11.3% in the second quarter from the year earlier and climbed 6.3% in the first quarter from the year-ago quarter.

The company’s loss in the latest quarter follows profits in the previous three quarters. The company reported a profit of $73.7 million in the third quarter, a profit of $65 million in the second quarter and $59.7 million in the first.

The company has now fallen short of estimates in the last two quarters. In the third quarter, it missed expectations by one cent with net income of 48 cents versus a mean estimate of net income of 49 cents per share.

Margins rose in the third quarter after falling the quarter before. Gross margin rose 5.3 percentage points to 32.7% from the quarter earlier quarter. In the second quarter, the figure rose 1.4 percentage points to 26.9% from the year earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from 38 cents a share to 32 cents over the last sixty days. At $1.73 per share, the average estimate for the fiscal year has risen from $1.72 sixty days ago.

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

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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