What's In The Cards For Sealed Air (SEE) In Q4 Earnings?
Zacks Investment Research | Feb 05, 2018 06:58AM ET
Sealed Air Corporation (NYSE:SEE) is scheduled to report fourth-quarter and full-year 2017 results on Feb 8, before the market opens.
Notably, the company’s earnings performance has not been impressive for the past few quarters. In the last reported quarter, Sealed Air’s earnings per share came in with the Zacks Consensus Estimate. Moreover, the company witnessed an average negative earnings surprise of 1.99% in the trailing four quarters.
Let’s see how things are shaping up for this announcement.
Key Factors to Consider
Sealed Air expects revenues for full-year 2017 to be nearly $4.4 billion, reflecting a 5% increase over the prior year. The company guided that its adjusted EBITDA will be around $830 million for the year. Adjusted EPS is likely to be in the range of $1.75-$1.80 for the year.
The Zacks Consensus Estimate for full-year revenues is pegged at $4.4 million, representing an year over year improvement of 5%. Further, our consensus estimates indicate that EPS will be $1.80 in 2017, reflecting a year over year decline of 32%.
Notably, Sealed Air delivered an improved performance in the third-quarter 2017 compared with the first half of 2017, when it delivered 3% constant-dollar top-line growth and 18% margin growth. The company anticipates this momentum to have continued into the fourth quarter as well, backed by expectations of higher sales and pricing. We expect net sales for the quarter will be around $1.2 billion, reflecting a decrease of around 29% year over year.
Sealed Air’s Food Care segment in the fourth quarter will benefit from increasing customer’s interest for innovative platforms including the Internet of Things, Intellibot robotics, clean-in-place solutions, biodegradable chemistry, dry lube and others. Further, constant efforts to increase price of products to combat elevated costs will drive the division’s growth.
The Zacks Consensus Estimate for the segment’s net sales is pegged at $745 million for the quarter, representing an year over year decline of 11% due to weak economic conditions which could negatively impact demand.
Sealed Air’s Product Care division will gain from the sale of Diversey Care division. The Zacks Consensus Estimates indicates that segment’s revenues will reach $435 million in the to-be-reported quarter, reflecting an year over year growth of 10%.
Furthermore, focus on innovations, growth in the global protein market and acquisitions are likely to be conducive to growth. However, elevated raw material costs remain headwinds for the quarter. The Zacks Consensus Estimates for earnings per share is pegged at 57 cents for fourth-quarter 2017, down 33% year over year.
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Moreover, shares of Sealed Air have lost 6.7%, underperforming 11.1% growth recorded by the industry due to the prevailing headwinds.
Earnings Whispers
Our proven model does not conclusively show that Sealed Air is likely to beat on earnings this quarter as it does not possess the key components. A stock needs to have both a positive Zacks Investment Research
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