Sonoco Products Co : Citigroup Cuts Target Price To $59 From $63

Sonoco Products Company SON reported adjusted earnings per share (EPS) of $1.49 in third-quarter 2024, beating the Zacks Consensus Estimate of $1.44. The figure was within the company’s guidance of $1.40-$1.60. The bottom line improved 2% from the prior-year quarter.

Including one-time items, the company reported an EPS of 51 cents compared with the year-ago quarter’s $1.32.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Sonoco’s net sales were $1.68 billion, which missed the Zacks Consensus Estimate of $1.70 million. The top line fell 2% year over year, hurt by the divestiture of Protective Solutions and the thermoformed food packaging plant closure.

Sonoco Products Company Price, Consensus and EPS Surprise

Sonoco Products Company price-consensus-eps-surprise-chart | Sonoco Products Company Quote

Sonoco’s Q3 Operational Update

The cost of sales was $1.32 billion, 2.2% lower than the year-earlier quarter. The gross profit in the reported quarter totaled $359 million, down 1.4% year over year. The gross margin was 21.4% compared with the year-ago quarter’s 21.3%.

Selling, general and administrative expenses amounted to $191 million, up 4.4% year over year.

Adjusted operating income was $211 million in the reported quarter compared with the prior-year quarter’s $213 million. The operating margin was 12.6%, down from the year-ago quarter’s 12.5%.

SON’s Q3 Segmental Performance

The Consumer Packaging segment’s net sales were fairly flat year over year at $984 million. The impacts of lower pricing were partially offset by year-over-year volume growth in metal aerosol cans and flexible packaging. Operating profit amounted to $123 million, up 5% from the prior-year quarter.

Net sales in the Industrial Paper Packaging segment were $585 million, reflecting a year-over-year rise of 1% due to higher selling prices. Operating profit totaled $70 million, reflecting a 6% year-over-year fall. The gains were partially offset by continued pressure from cost impacts.

Sales for the All Other segment, which comprises protective, healthcare, retail and industrial plastics units, were $107 million, down 26% year over year. Operating profit for the segment totaled $17 million compared with the year-ago quarter’s $21 million.

Sonoco’s Q3 Cash Flow & Balance Sheet Updates

SON reported cash and cash equivalents of $1.93 billion at the end of the third quarter of 2024 compared with $0.15 billion at the end of 2023. The company generated cash flow from operating activities of around $438 million in the first nine months of 2024 compared with $617 million in the prior-year period.

As of Sept. 29, 2024, total debt was $4.8 billion, up $1.7 billion from Dec. 31, 2023.

SON’s Q4 & 2024 Guidance

Sonoco projects the fourth-quarter 2023 adjusted EPS between $1.15 and $1.35.

The company expects an adjusted EPS of $5.05-$5.25 for 2024, updated from the prior mentioned $5.00-$5.30. Adjusted EBITDA is expected between $1.05 billion and $1.09 billion. The operating cash flow for the year is expected between $650 million and $750 million.

Sonoco’s Price Performance

SON shares have lost 3.9% in the past year against the industry’s growth of 27.2%.

SON’s Zacks Rank

The company currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sonoco’s Peer Performances in Q3

Packaging Corporation of America PKG reported an adjusted EPS of $2.65 in the third quarter of 2024, beating the Zacks Consensus Estimate of earnings of $2.48. The bottom line was higher than the company’s earnings guidance of $2.45 per share and grew 29% year over year. The upside was driven by higher volume in both segments, and increased prices and mix in the Packaging segment, partially offset by lower prices and mix in the Paper segment.

Sales in the third quarter rose 12.6% year over year to $2.18 billion due to higher volumes. The top line beat the Zacks Consensus Estimate of $2.09 billion.

AptarGroup, Inc. ATR posted third-quarter 2024 adjusted EPS of $1.49, beating the Zacks Consensus Estimate of $1.43. The bottom line increased 6% year over year from $1.40 (including comparable exchange rates).

Total sales grew 1.8% year over year to $909 million in the reported quarter. However, the reported figure missed the Zacks Consensus Estimate of $932 million. Core sales, excluding currency and acquisition effects, improved 2% year over year due to strong performances in the pharma and closures segments. We expected core sales to rise 4.7% in the quarter.

Amcor Plc AMCR reported a first-quarter fiscal 2025 (ended Sept. 30, 2024) adjusted EPS of 16 cents, which met the Zacks Consensus Estimate. The bottom line grew 4% from the year-ago quarter.

Total sales fell 2.6% year over year to $3.35 billion in the reported quarter. The downside was led by a 1% unfavorable impact of foreign exchange and a 1% impact of pass-through of lower raw material costs. The top line missed the Zacks Consensus Estimate of $3.57 billion.

Zacks Investment Research

The PlayStation 5 Pro is here, and early glimpses reveal an impressive balance of design updates, hardware power, and surprising spec tweaks aimed at giving players an elevated gaming experience.

Eurogamer has provided a first look at Sony Group Corp.‘s latest addition to the PS5 lineup, allowing fans to see the console's unboxing before it officially launches on Nov. 7.

See Also: Black Ops 6 Shatters Records: Call Of Duty’s Biggest Launch Drives 60% Sales Spike

Same Packaging, Slimmer Build

For those familiar with the original PlayStation 5, the Pro's packaging will look nearly identical. The PS5 Pro arrives in a straightforward, easy-to-open box, with the familiar white cardboard housing that includes the console, power cable, HDMI and USB-C cables, the DualSense controller, and a horizontal stand.

Once unboxed, however, the Pro's design starts to set it apart. While still taller than the recently released PS5 Slim, the Pro model is notably more compact than the original, bulkier launch model.

Despite earlier leaks suggesting a larger, heavier build, the Pro is surprisingly manageable. At 3.1 kg, it's only slightly heavier than the PS5 Slim, which weighs in at 2.6 kg, and comes in under the launch PS5's 3.9 kg weight.

A Closer Look At Hardware: Power Supply, GPU, Memory

Inside the box, the safety guide offers insights into the PS5 Pro's hardware. The console's power supply is rated at 390 watts, a step up from the 340-watt rating of both the original and Slim Digital Edition models. While this increased power doesn't directly translate to gameplay performance, it does hint at a boost in the console's capacity to handle more demanding tasks.

One of the most anticipated details is the Pro's GPU performance, confirmed at 16.7 teraflops (TFLOPs). This marks a significant jump over the base PS5's capabilities, even if it falls short of the rumored 33.5 TFLOPs figure that circulated ahead of release.

Sony's official TFLOP count points to a stable increase in graphical power, without implementing the complex RDNA 3 architecture that AMD offers with dual-issue FP32 capabilities.

In another subtle but important upgrade, the PS5 Pro also includes an extra 2GB of DDR5 memory. This improvement is expected to free up more high-speed memory for gaming, as the additional memory will handle certain system functions that previously competed for resources with game applications.

Additional Features And User-Friendly Updates

Sony has also added some user-friendly touches. While the PS5 Pro can stand vertically without a dedicated stand, there's some speculation that this could impact cooling. Sony includes a stand in the box, though the price of replacement stands has surprised some reviewers. Notably, the stand now comes with an add-on plate to support both the Pro and the original PS5 model, a convenient feature for players who own multiple editions.

Another change is the addition of a user-accessible CMOS battery bay. This new design will let players easily replace the battery as it ages, ensuring the Pro's longevity without costly repairs.

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