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Factors Likely to Impact AptarGroup’s (ATR) Q4 Earnings

Zacks
AptarGroup, Inc. ATR is scheduled to report fourth-quarter and full-year 2017 results on Feb 12, after the closing bell. In the last reported quarter, the company reported a 1% increase in earnings per share while revenues rose 6%.
Notably, the company’s earnings performance has been impressive for the past few quarters. In the last reported quarter, AptarGroup’s earnings per share beat the Zacks Consensus Estimate by a margin of 3.75%. The company witnessed an average positive earnings surprise of 3.77% in the trailing four quarters.
Let’s see how things are shaping up for this announcement.
AptarGroup, Inc. Price and EPS Surprise
In the Beauty + Home segment, sales to the personal care and home care markets are improving with new business wins contributing to growth. The company offers the industry’s broadest solutions portfolio and going by the sales improvements lately, it seems the company’s initiatives have yielded results and the segment is on track to deliver growth. Per the Zacks Consensus Estimate, the segment’s sales are pegged at $314 million, a projected 8% growth from the $290 million in the prior-year quarter.
However, the segment is experiencing operational challenges at the European facility that produces decorative components sold to the beauty market. The operational issues are isolated to this one facility. Although the company is making progress in remediating the situation, it will take several quarters before results turn positive. Till then, results will be impacted. The Zacks Consensus Estimate for the segment’s operating profit is at $18.3 million, reflecting a year-over-year decline of 13%.
In the Food + Beverage segment, demand for innovative dispensing closures is rising in both the food and beverage markets. AptarGroup’s focus on execution of its growth strategy, investing for the future will help customers to grow their businesses with its innovative dispensing solutions. The company remains focused on returning Beauty + Home to sustainable, profitable growth. For hoe fourth quarter, the Zacks Consensus Estimate for the segment’s revenues is pegged at $76 million, reflecting a 6% growth year over year. The estimate for operating profit is at $5.65 million, reflecting a 20% increase year over year.
The Pharma segment continues to benefit from strong demand across its portfolio of devices, mainly for devices used for allergy treatment, decongestions and ophthalmics, along with components sold to the injectables markets. Per the Zacks Consensus Estimate, the segment’s sales will improve 10% year over year to $193. The estimate for operating income for the segment is pegged at $57 million, a 10% increase year over year.
In the to-be-reported quarter, revenue growth in each segment will contribute to overall growth in revenues. The Zacks Consensus Estimate for the quarter is at $583.8 million, reflecting 8.3% year-over-year improvement.
However, earnings will bear the impact of elevated raw material costs and lower results at its decorative facility. Further, the company’s results in the fourth quarter are generally negatively impacted by customer plant shutdowns in December. This could impact results as well.
For fourth-quarter 2017, AptarGroup expects earnings to be in the range of 68-73 cents, a 2% increase at the mid-point from the year-ago earnings. The Zacks Consensus estimate for earnings per share is at 71 cents, reflecting a 3% increase year over year.
Over the past year, shares of AptarGroup have gained 10.5%, outperforming the 3.8% growth recorded by the industry.
AptarGroup currently carries a Zacks Rank #3 (Hold).
Stocks Worth Considering
Here are a few industrial products stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
Deere & Company DE has an Earnings ESP of +1.56% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Deere’s shares have surged 41% in the past year.
Altra Industrial Motion Corp. AIMC has an Earnings ESP of +1.03% and a Zacks Rank #2. Its shares have gone up 19% in a year’s time.
The Earnings ESP for Cintas Corporation CTAS is +1.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. It carries a Zacks Rank #2. Shares of Cintas have gone up 29% in a year’s time.
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