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Sep 30, 2023
Silgan Q3 2023 Earnings Report
Silgan's Q3 2023 performance reflected resilience amidst challenging market conditions, with strong growth in high-value dispensing products and strategic cost reduction initiatives.
Key Takeaways
Silgan Holdings reported Q3 2023 net sales of $1.80 billion and net income of $110.6 million, or $1.02 per diluted share. Adjusted net income per diluted share was $1.16. The company saw mid-single digit growth in high value dispensing products. A multi-year $50 million cost reduction program was announced. The company expects earnings growth in 2024 independent of market recovery.
Net sales for the third quarter of 2023 were $1.80 billion, a decrease of 9% compared to the same period in the prior year.
Net income for the third quarter of 2023 was $110.6 million, or $1.02 per diluted share, as compared to $138.7 million, or $1.25 per diluted share for the third quarter of 2022.
The company repurchased $175 million of stock and expects to return over $250 million to shareholders in 2023.
A multi-year $50 million cost reduction program was announced.
Silgan
Silgan
Silgan Revenue by Segment
Revenue by Segment
Dispensing & Specialty Closures Revenue
CapyFin.comMetal Containers Revenue
CapyFin.comCustom Containers Revenue
CapyFin.com Forward Guidance
The Company has revised its estimate of adjusted net income per diluted share for the full year of 2023 from a range of $3.40 to $3.60 to a range of $3.30 to $3.40 primarily due to anticipated lower volumes in the fourth quarter and higher interest expense.
Positive Outlook
- Expects earnings growth in 2024 independent of market recovery.
- Customer partnerships remain strong.
- Actively managing what is within our control.
- Confident that the Company is well positioned to continue to achieve our medium and long-term growth objectives.
- See positive signs in our customers' promotional activity, and our customers appear to be targeting volume growth.
Challenges Ahead
- Revised estimate of adjusted net income per diluted share for the full year of 2023 from a range of $3.40 to $3.60 to a range of $3.30 to $3.40 primarily due to anticipated lower volumes in the fourth quarter and higher interest expense.
- Interest expense for 2023 is expected to be approximately $0.33 per diluted share higher than the prior year primarily due to higher interest rates.
- Volume in the Dispensing and Specialty Closures and Metal Containers segments for 2023 are now expected to be below record levels achieved in 2022 due to customer destocking in the food and beverage markets initiated late in the second quarter and in adjacent markets in the second half of the year.
- Custom Containers volumes in 2023 are expected to be approximately 10% below the prior year due to delays in the commercialization of new business and customer destocking programs.
- For the fourth quarter of 2023, the Company expects a low single digit volume decline in the Dispensing and Specialty Closures segment and a mid-single digit volume decline in the Metal Containers segment as compared to the prior year quarter, with customer destocking in the food and beverage and adjacent markets impacting volumes in the quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income