The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Crown Holdings (NYSE:CCK) and the rest of the industrial packaging stocks fared in Q2.
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 decent 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 at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation. Thankfully, industrial packaging stocks have been resilient with share prices up 5.6% on average since the latest earnings results.
Crown Holdings (NYSE:CCK) Formerly Crown Cork & Seal, Crown Holdings (NYSE:CCK) produces packaging products for consumer marketing companies, including food, beverage, household, and industrial products.
Crown Holdings reported revenues of $3.04 billion, down 2.2% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.
Commenting on the quarter, Timothy J. Donahue, Chairman, President and Chief Executive Officer, stated, "The Company performed well during the quarter, led by strong results in each of the global beverage businesses. Benefitting from our broad geographic presence and strategic customer alliances, beverage segment income improved by 21% in the second quarter on a combined global basis. Beverage can shipments improved 6% globally in the second quarter, including 9% in North America. Beverage can shipments in Europe and Latin America were also strong and exceeded longer-term expectations of low-to mid-single digit volume growth."
Interestingly, the stock is up 16.7% since reporting and currently trades at $90.41.
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Best Q2: Avery Dennison (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, outperforming analysts’ expectations by 1.9%. It was a very strong quarter for the company with an impressive beat of analysts’ organic revenue and operating margin estimates.
Avery Dennison pulled off the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.2% since reporting. It currently trades at $221.85.
Slowest Q2: 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, falling short of analysts’ expectations by 3.4%. It was a weak quarter for the company with a miss of analysts’ organic revenue and operating margin estimates.
Interestingly, the stock is up 7.2% since the results and currently trades at $52.27.
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, surpassing analysts’ expectations by 2.5%. Revenue aside, it was a very strong quarter for the company with an impressive beat of analysts’ volume estimates and a decent beat of analysts’ operating margin estimates.
The stock is up 8.7% since reporting and currently trades at $209.54.
International Paper (NYSE:IP) Established in 1898, International Paper (NYSE:IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications.
International Paper reported revenues of $4.73 billion, up 1.1% year on year, in line with analysts’ expectations. Revenue aside, it was a very strong quarter for the company with an impressive beat of analysts’ earnings and operating margin estimates.
The stock is up 5.3% since reporting and currently trades at $48.40.
This content was originally published on Stock Story
