Is A Beat In The Cards For Sonoco (SON) In Q4 Earnings?

 | Feb 11, 2018 09:13PM ET

Sonoco Products Company (NYSE:SON) is scheduled to report fourth-quarter and full-year 2017 results on Feb 15, before the market opens. In the last reported quarter, the company recorded a 5.6% increase in earnings per share while revenues rose 9.6%.
In the last reported quarter, AptarGroup’s earnings per share beat the Zacks Consensus Estimate by a margin of 2.70%. The company witnessed an average positive earnings surprise of 1.51% in the trailing four quarters.
Let’s see how things are shaping up for this announcement.
Sonoco Products Company Price and EPS Surprise
Sonoco Products Company Quote

Key Factors to Consider

For fourth-quarter 2017, the company anticipates earnings per share in the range of 68-74 cents. Compared with the prior-year quarter’s earnings per share of 62 cents, the mid-point of the guidance reflects year-over-year growth of 14.5%. The Zacks Consensus estimate for earnings per share is at 73 cents, reflecting a 17.7% increase year over year.
Higher resin prices during the fourth quarter will be a headwind to Sonoco’s polymer-based packaging businesses. The storms that hit the United States could impact consumers buying habits and consequently the revenues. Sonoco’s small paper converting operation in Puerto Rico has been shut down as Hurricane Maria struck. Production from the plant will be impacted while power and logistics infrastructure is rebuilt.
However, revenues will benefit from acquisitions made over the last year. Sonoco has made adjustments to portfolio adjustments in the last year to position the company for growth and gain market share in rapidly growing consumer markets. In July, Sonoco closed the Clear Lam Packaging acquisition and also concluded the buyout of Peninsula in March 2017. Further, the company has been implementing price increases to counter escalating raw material costs.
Sonoco has made adjustments to portfolio adjustments in the last year to position the company for growth, gain market share in faster growing consumer markets. In July, Sonoco closed the Clear Lam Packaging acquisition and completed the acquisition of Peninsula in March 2017.
The Zacks Consensus Estimate for revenues for the fourth quarter is at $1.27 billion, reflecting a 10.8% year-over-year growth.