As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at industrial packaging stocks, starting with Silgan Holdings (NYSE:SLGN).
Industrial packaging companies have built competitive advantages from economies of scale that lead to advantaged purchasing and capital investments that are difficult and expensive to replicate. Recently, eco-friendly packaging and conservation are driving customers preferences and innovation. For example, plastic is not as desirable a material as it once was. Despite being integral to consumer goods ranging from beer to toothpaste to laundry detergent, these companies are still at the whim of the macro, especially consumer health and consumer willingness to spend.
The 9 industrial packaging stocks we track reported a satisfactory Q2. As a group, revenues missed analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was 2.3% below.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Thankfully, industrial packaging stocks have been resilient with share prices up 6.9% on average since the latest earnings results.
Silgan Holdings (NYSE:SLGN)
Established in 1987, Silgan Holdings (NYSE:SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.Silgan Holdings reported revenues of $1.38 billion, down 3.2% year on year. This print fell short of analysts’ expectations by 3.4%. Overall, it was a softer quarter for the company with a miss of analysts’ organic revenue estimates.
“The Silgan team delivered solid second quarter results that were above the midpoint of our guidance range, as our business continues to show strength and improving year-over-year trends,” said Adam Greenlee, President and CEO.
Interestingly, the stock is up 6.5% since reporting and currently trades at $51.90.
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Best Q2: Sealed Air (NYSE:SEE)
Founded in 1960, Sealed Air Corporation (NYSE: NYSE:SEE) specializes in the development and production of protective and food packaging solutions, serving a variety of industries.Sealed Air reported revenues of $1.35 billion, down 2.6% year on year, outperforming analysts’ expectations by 2.9%. The business had an exceptional quarter with an impressive beat of analysts’ operating margin estimates and full-year revenue guidance exceeding analysts’ expectations.
Sealed Air scored the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 3.1% since reporting. It currently trades at $35.48.
Ball (NYSE:BALL)
Started with a $200 loan in 1880, Ball (NYSE:BLL) manufactures aluminum packaging for beverages, personal care, and household products as well as aerospace systems and other technologies.Ball reported revenues of $2.96 billion, down 17% year on year, falling short of analysts’ expectations by 4.5%. It was a slower quarter as it posted a miss of analysts’ organic revenue estimates.
Ball delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 3.4% since the results and currently trades at $65.99.
Avery Dennison (NYSE:NYSE:AVY)
Founded as Kum Kleen Products, Avery Dennison (NYSE:AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries.Avery Dennison reported revenues of $2.24 billion, up 6.9% year on year. This result topped analysts’ expectations by 1.9%. It was a very strong quarter as it also logged an impressive beat of analysts’ organic revenue estimates.
Avery Dennison achieved the fastest revenue growth among its peers. The stock is down 1.4% since reporting and currently trades at $221.29.
Packaging Corporation of America (NYSE:PKG)
Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products, also offering displays and protective packaging solutions.Packaging Corporation of America reported revenues of $2.08 billion, up 6.3% year on year. This result topped analysts’ expectations by 2.5%. It was a very strong quarter as it also recorded an impressive beat of analysts’ volume estimates and a decent beat of analysts’ operating margin estimates.
The stock is up 14.4% since reporting and currently trades at $220.63.
This content was originally published on Stock Story
