Sonoco Q2 2022 Earnings Report
Key Takeaways
Sonoco reported strong second-quarter results with record sales of $1.91 billion and base earnings of $1.76 per diluted share, driven by strong performance in the Consumer Packaging and Industrial Paper Packaging segments. The company has increased its full-year base earnings guidance to a range of $6.20 to $6.30 per diluted share.
Net sales reached a record $1.91 billion, a 38% increase year-over-year.
GAAP net income per diluted share was $1.33, compared to a loss of $(3.34) in the same period last year.
Base net income was $1.76 per diluted share, an 89% increase from $0.93 per diluted share in the same period of 2021.
The Company has increased its outlook for full-year base earnings to a range of $6.20 to $6.30 per diluted share.
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Sonoco Revenue by Segment
Forward Guidance
The Company expects third-quarter base earnings to be in the range of $1.35 to $1.45 per diluted share. Full-year 2022 base earnings are expected to be between $6.20 to $6.30 per diluted share. Full-year 2022 cash flow from operations and free cash flow guidance remains unchanged at a range of $690 million to $740 million and $365 million to $415 million, respectively.
Positive Outlook
- Consumer Packaging segment will continue to benefit from the integration of Metal Packaging.
- Sonoco remains committed to our strategic priorities of simplifying our portfolio into fewer, but bigger businesses.
- Sonoco plans to invest in expanding our core Consumer and Industrial businesses to drive further growth and productivity improvement.
- Sonoco is executing self-help actions and achieving our sustainability goals.
- Sonoco remains focused on returning cash to our shareholders with sector-leading, regular dividends.
Challenges Ahead
- Segment margin percentage should normalize for the remainder of the year.
- The planned shutdown of the Hartsville corrugated medium machine to complete Project Horizon will occur within the third quarter.
- The eight-week shutdown is expected to negatively impact third-quarter Industrial Paper Packaging operating profit between $10 million to $15 million.
- Uncertainty regarding the future performance of the overall economy.
- Continued effects of the pandemic on global supply chains, and potential changes in raw material prices, other costs, and the Company's effective tax rate.
Revenue & Expenses
Visualization of income flow from segment revenue to net income