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Mar 31, 2020
Reynolds Q1 2020 Earnings Report
Reported strong financial results for Q1 2020, exceeding expectations despite COVID-19 challenges, and provided an updated annual outlook for 2020.
Key Takeaways
Reynolds Consumer Products reported a strong start to the year with net revenues of $730 million and earnings per share of $0.14. The company experienced increased demand due to the COVID-19 pandemic, which drove volume increases. The company is managing the business to ensure continued long term earnings growth for shareholders.
Net revenues increased to $730 million, up from $665 million in the prior year period.
Earnings Per Share (EPS) reached $0.14, with an adjusted EPS of $0.30.
Net income increased to $26 million, and Adjusted EBITDA was $135 million.
The company increased its guidance on all profit measures and reduced its Net Debt target for fiscal year 2020.
Reynolds
Reynolds
Reynolds Revenue by Segment
Revenue by Segment
Reynolds Cooking & Baking Revenue
CapyFin.comHefty Waste & Storage Revenue
CapyFin.comHefty Tableware Revenue
CapyFin.comPresto Products Revenue
CapyFin.comUnallocated Revenue
CapyFin.com Forward Guidance
Reynolds Consumer Products updated its fiscal year 2020 guidance due to increased demand related to the COVID-19 pandemic and anticipated benefit from lower interest rates. The company expects COVID-19 operational-related cost increases to offset the impact of the increased demand resulting in its Adjusted EBITDA forecast for Q2 – Q4 2020 remaining in line with its previous guidance.
Positive Outlook
- Net Income to be in the range of $335 million to $355 million
- Earnings Per Share to be in the range of $1.60 to $1.69 per share
- Adjusted EBITDA to be in the range of $695 million to $715 million
- Adjusted Net Income to be in the range of $388 million to $403 million
- Adjusted Earnings Per Share to be in the range of $1.85 to $1.92 per share
Challenges Ahead
- The magnitude and duration of increased demand remains uncertain.
- The greatest challenge it faces as a result of the pandemic is its ability to maintain the level of supply needed to keep up with the increased demand.
- COVID-19 related volume increases in 2020 will make it more challenging to show year over year improvement in Adjusted EBITDA in 2021.
- The current operating environment necessitates additional costs.
- Net Debt to be in the range of $1.9 billion to $2.1 billion
Revenue & Expenses
Visualization of income flow from segment revenue to net income