Sonoco Products Earnings Preview

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Sonoco Products (NYS: SON) didn't hit the Street's expectations last quarter, but investors hope it will rebound this quarter. The company will unveil its latest earnings on Tuesday. Sonoco Products is a manufacturer of industrial and consumer packaging products and a provider of packaging services.

What analysts say:
 

  • Buy, sell, or hold?: Analysts think investors should stand pat on Sonoco Products with six of nine analysts rating it hold. Analysts like Sonoco Products better than competitor Bemis overall. Two out of seven analysts rate Bemis a buy compared to three of nine for Sonoco Products.
  • Revenue forecasts: On average, analysts predict $1.13 billion in revenue this quarter. That would represent a rise of 7.6% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.64 per share. Estimates range from $0.57 to $0.66.

What our community says:
CAPS All-Stars are solidly behind the stock with 94.4% giving it an outperform rating. The community at large agrees with the All-Stars with 91.6% granting it a rating of outperform. Fools have embraced Sonoco Products, though the message boards have been quiet lately with only 29 posts in the past 30 days. Despite the majority sentiment in favor of Sonoco Products, the stock has a middling CAPS rating of three out of five stars.

Management:
Sonoco Products' profit has risen year over year by an average of 1.5% over the past five quarters. The company's gross margin shrank by 2.1 percentage points in the last quarter. Revenue rose 11.7% while cost of sales rose 14.6% to $936.8 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

16.9%

17.4%

17.7%

19.0%

Operating Margin

7.3%

8.0%

7.7%

8.1%

Net Margin

4.7%

5.1%

3.1%

5.6%

One final thing: If you want to keep tabs on Sonoco Products movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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