Sonoco Products Company (SON) has reported 87.06 percent jump in profit for the quarter ended Dec. 31, 2016. The company has earned $104.87 million, or $1.04 a share in the quarter, compared with $56.06 million, or $0.55 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $62.52 million, or $0.62 a share compared with $65.48 million or $0.64 a share, a year ago. Revenue during the quarter dropped 9.86 percent to $1,142.20 million from $1,267.14 million in the previous year period. Gross margin for the quarter contracted 8 basis points over the previous year period to 18.80 percent. Total expenses were 83.01 percent of quarterly revenues, down from 93.69 percent for the same period last year. This has led to an improvement of 1067 basis points in operating margin to 16.99 percent.
Operating income for the quarter was $194.04 million, compared with $80 million in the previous year period.
Commenting on the Company fourth quarter results, Sonoco president and chief executive officer Jack Sanders said, "Sonocos results in the fourth quarter were at the mid-point of our guidance as we managed our diversified mix of businesses well. Gross profit margins were essentially flat year-over-year, despite rising raw material costs and a much greater than expected seasonal slowdown in business activity by many of our consumer and industrial customers. The year-over-year improvement in GAAP earnings in the quarter was driven by a net after-tax gain of $49.3 million on the disposal of our blowmolding operations. Compared to the prior-year quarter, the Company base earnings were negatively impacted by the divestiture, fewer days, negative manufacturing productivity, and higher labor, maintenance and other operating costs. These items were partially offset by benefits from fixed-cost productivity improvements, as well as lower management incentives and pension and post-retirement benefit costs.
The company projects diluted earnings per share to be in the range of $0.55 to $0.63 for the first-quarter. For financial year 2017, the company projects diluted earnings per share to be in the range of $2.66 to $2.76.
Working capital increases sharplySonoco Products Company has recorded an increase in the working capital over the last year. It stood at $546.15 million as at Dec. 31, 2016, up 41.91 percent or $161.29 million from $384.86 million on Dec. 31, 2015. Current ratio was at 1.68 as on Dec. 31, 2016, up from 1.42 on Dec. 31, 2015. Cash conversion cycle (CCC) has increased to 8 days for the quarter from 6 days for the last year period. Days sales outstanding went up to 26 days for the quarter compared with 25 days for the same period last year.
Days inventory outstanding was almost stable at 18 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 36 days for the quarter, when compared with the previous year period.
Debt comes down
Sonoco Products Company has recorded a decline in total debt over the last one year. It stood at $1,052.74 million as on Dec. 31, 2016, down 6.70 percent or $75.62 million from $1,128.37 million on Dec. 31, 2015. Total debt was 26.83 percent of total assets as on Dec. 31, 2016, compared with 28.07 percent on Dec. 31, 2015. Debt to equity ratio was at 0.68 as on Dec. 31, 2016, down from 0.74 as on Dec. 31, 2015. Interest coverage ratio improved to 16.46 for the quarter from 5.68 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
