Sonoco Products Company (SON) has reported a 68.10 percent jump in profit for the quarter ended Mar. 29, 2015. The company has earned $87.92 million, or $0.86 a share in the quarter, compared with $52.30 million, or $0.50 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $57.09 million, or $0.56 a share compared with $53.89 million or $0.52 a share, a year ago.
Revenue during the quarter went up marginally by 1.49 percent to $1,203.26 million from $1,185.63 million in the previous year period. Gross margin for the quarter expanded 66 basis points over the previous year period to 18.57 percent. Total expenses were 89.43 percent of quarterly revenues, down from 92.70 percent for the same period last year. This has led to an improvement of 327 basis points in operating margin to 10.57 percent.
Operating income for the quarter was $127.14 million, compared with $86.56 million in the previous year period.
Commenting on the Company’s first quarter results, Sonoco president and chief executive officer Jack Sanders said, "To begin with, we are very pleased to conclude what we believe was the most significant portion of the Fox River environmental litigation. The time period for appeal of the court-approved settlement we reached last year with the government and certain other named parties expired last week."
Second Quarter and Full-Year 2015 Outlook Sonoco expects second quarter 2015 base earnings to be in the range of $.64 to $.69 per diluted share. For the second-quarter, Sonoco Products Co projects revenue to grow in the range of percent to percent. For financial year 2015, the company forecasts diluted earnings per share to be in the range of $0.64 to $0.69.
Working capital increases
Sonoco Products Co has recorded an increase in the working capital over the last year. It stood at $561.29 million as at Mar. 29, 2015, up 9.04 percent or $46.52 million from $514.77 million on Mar. 30, 2014. Current ratio was at 1.65 as on Mar. 29, 2015, up from 1.58 on Mar. 30, 2014.
Cash conversion cycle (CCC) has increased to 32 days for the quarter from 28 days for the last year period. Days sales outstanding went up to 53 days for the quarter compared with 51 days for the same period last year.
Days inventory outstanding has decreased to 37 days for the quarter compared with 38 days for the previous year period. At the same time, days payable outstanding went down to 59 days for the quarter from 61 for the same period last year.
Debt remains almost stable
Total debt of Sonoco Products Co remained almost stable for the quarter at $1,252.44 million, when compared with the last year period. Total debt was 30.14 percent of total assets as on Mar. 29, 2015, compared with 31.48 percent on Mar. 30, 2014. Debt to equity ratio was almost stable at 0.82 as on Mar. 29, 2015, when compared with the last year. Interest coverage ratio improved to 9.62 for the quarter from 6.85 for the same period last year.
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