Yahoo Finance Sealed Air (SEE) to Report Q4 Earnings: What's in Store?
Sealed Air Corporation SEE is scheduled to report fourth-quarter 2022 results on Feb 09, before the opening bell.
Q4 Estimates
The Zacks Consensus Estimate for the fourth-quarter revenues is pegged at $1.46 billion, suggesting a fall of 4.7% from the year-ago reported figure. The Zacks Consensus Estimate for quarterly earnings is pinned at 98 cents per share, indicating a year-over-year decline of 12.5%.
Q3 Performance
Sealed Air’s third-quarter 2022 earnings increased year over year, while sales remained flat. Earnings beat the Zacks Consensus Estimate, whereas revenues missed the same. The company has a trailing four-quarter earnings surprise of 7.7%, on average.
Sealed Air Corporation Price and EPS Surprise
Sealed Air Corporation price-eps-surprise | Sealed Air Corporation Quote
What the Zacks Model Indicates
Our proven model doesn’t conclusively predict an earnings beat for Sealed Air this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Earnings ESP: Sealed Air has an Earnings ESP of -1.13%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Factors to Note
Sealed Air witnessed a 7% year-over-year overall volume decline in the third quarter of 2022. This was mainly due to muted customer spending amid the ongoing inflationary pressure. This trend is expected to have continued through the fourth quarter and its impacts are likely to get reflected in the company’s results in the quarter.
However, the company’s fourth-quarter performance is likely to have gained from the sustained demand for packaging of food, beverage and healthcare products, and e-commerce activities. Around 63% of the company’s revenues are generated from the packaging of protein, foods, fluids and goods for the medical and life-sciences industries, while e-commerce sales contribute nearly 11%.
In December 2018, Sealed Air had set forth a reformation plan called Reinvent SEE Strategy, along with a fresh restructuring program to boost growth and earnings. The strategy is focused on innovations, SG&A productivity, product-cost efficiency, channel optimization and customer service enhancements. The capabilities, operational disciplines and governance processes established through the Reinvent SEE business transformation are embedded in the company’s ongoing productivity improvement system, SEE Operating Engine.
Savings from these initiatives have been aiding the company in delivering sales growth and productivity gains and mitigating supply-chain challenges. This is expected to have driven the operating margin performance in the December-ended quarter.
However, SEE has been encountering supply-chain disruptions, higher raw material costs and elevated freight costs associated with the sourcing and movement of raw materials due to overall tight market conditions. These factors are likely to have impacted its margin performance in the to-be-reported quarter. The company has been increasing its R&D investments in innovation and automation, which are anticipated to have weighed on its margins.
Segment Estimates
The Zacks Consensus Estimate for the Food segment’s fourth-quarter net sales is pegged at $883 million, suggesting growth of 0.7% from the prior-year period’s reported figure. The Zacks Consensus Estimate for the segment’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) stands at $197 million, indicating a year-over-year decline of 3.4%. Lower volumes, owing to food retail market declines across the Americas and EMEA regions, and the adverse impacts of prior supply disruptions are expected to have hurt its performance.
The Zacks Consensus Estimate for the Protective Packaging segment’s fourth-quarter net sales is pegged at $574 million, indicating a year-over-year fall of 12.4%. The Zacks Consensus Estimate for the segment’s adjusted EBITDA is pinned at $107 million, suggesting a year-over-year decline of 15%.
The segment’s medical and life sciences portfolio has been gaining from strong demand for medical supplies, pharmaceuticals and personal protective equipment, coupled with higher demand for temperature assurance packaging solutions. However, lower volume, driven by recessionary pressures in the industrial and fulfillment markets, and unfavorable currency translation are likely to have offset these tailwinds.
Price Performance
In the past year, shares of Sealed Air have declined 15.8% against the industry’s growth of 2.8%.
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Stocks Poised to Beat Earnings Estimates
Here are some Industrial Products stocks, which, according to our model, have the right combination of elements to post an earnings beat in their upcoming releases:
Allegion plc ALLE has an Earnings ESP of +4.19% and currently sports a Zacks Rank #1. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has been unchanged in the past 30 days and is pegged at $1.37 per share. This suggests year-over-year growth of 23.4%
The Zacks Consensus Estimate for ALLE’s quarterly revenues is pegged at $849 million, indicating year-over-year growth of 19.7%. ALLE has a trailing four-quarter earnings surprise of 8.8%, on average.
Deere & Co. DE currently has an Earnings ESP of +2.30% and a Zacks Rank #2. The Zacks Consensus Estimate for DE’s first-quarter fiscal 2023 earnings has been unchanged in the past 30 days and is pegged at $5.51 per share. The consensus mark suggests year-over-year growth of 88.7%.
The Zacks Consensus Estimate for DE’s quarterly revenues is pegged at $11.4 billion, indicating growth of 33.9% from the prior-year quarter’s reported level. DE has a trailing four-quarter earnings surprise of 7.1%, on average.
The Middleby Corporation MIDD currently has an Earnings ESP of +2.20% and a Zacks Rank #2. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has been unchanged in the past 30 days and is pegged at $2.46 per share. This suggests year-over-year growth of 16.6%.
The Zacks Consensus Estimate for quarterly revenues is pegged at $1.01 billion, indicating growth of 16.8% from the prior-year quarter’s reported level.
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