The provider of industrial packaging products and services, Greif, Inc. GEF reported adjusted earnings of 45 cents per share in first-quarter fiscal 2017 (ended Jan 31, 2017), which increased 12.5% year over year. However, earnings fell short of the Zacks Consensus Estimate of 50 cents.
Including one-time items, the company posted earnings of 10 cents per share, compared to a loss of 19 cents per share recorded in the year-ago quarter.
Operational Update
Revenues increased 6% year over year to $820.9 million from $771.4 million in the prior-year quarter. Also, revenues beat the Zacks Consensus Estimate of $811 million.
Cost of sales increased 6% year over year to $657.6 million. Gross profit grew 8% year over year to $163.3 million. Gross margin expanded 20 basis points to 19.8% in the quarter. Selling, general and administrative (SG&A) expenses went up 3.6% year over year to $96.6 million. Adjusted operating profit climbed 14.8% year over year to $66.7 million. Adjusted operating margin advanced 50 basis points to 8% in the quarter.
Segmental Performance
Rigid Industrial Packaging & Services: This segment reported sales of $561.5 million, down 5% from $601 million in the year-ago quarter. Adjusted operating profit jumped 22.6% year over year to $43.4 million from $35.4 million.
Paper Packaging: Sales were up 15.5% year over year to $182.9 million, on the back of increases in volumes and increased sales of specialty products. The segment reported an adjusted operating profit of $19.9 million, down 12.3% year over year, due primarily to an increase in pension costs and allocated corporate costs.
Flexible Products & Services: Sales from this segment declined 4.4% year over year to $69.7 million. Excluding the impact of divestitures, sales increased 3.5% mainly due to product volume improvements. The segment reported adjusted operating profit of $1.6 million compared to an operating loss of $1.6 million in the year-earlier quarter.
Land Management: The segment’s sales plunged 30.8% year over year to $1.6 million. Operating income remained flat year over year at $2.1 million.
Greif Bros. Corporation Price, Consensus and EPS Surprise
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