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Oct 03, 2021
Sonoco Q3 2021 Earnings Report
Sonoco's Q3 2021 performance improved with record net sales and solid customer demand, despite facing supply chain disruptions and inflation.
Key Takeaways
Sonoco reported record third-quarter net sales of $1.42 billion, an increase of 7.8% compared to the previous year. GAAP earnings per diluted share were $1.12, up from $0.82 in 2020, including a net after-tax benefit of $0.21 per diluted share. Base earnings per diluted share were $0.91, exceeding the company's guidance.
Net sales reached a record $1.42 billion, up 7.8% year-over-year.
GAAP earnings per diluted share were $1.12, compared to $0.82 in 2020.
Base earnings per diluted share were $0.91, exceeding prior guidance.
The company skillfully navigated supply chain disruptions, raw material shortages, and inflation to meet customer needs.
Sonoco
Sonoco
Sonoco Revenue by Segment
Revenue by Segment
Consumer Packaging Revenue
CapyFin.comIndustrial Paper Packaging Revenue
CapyFin.com Forward Guidance
Sonoco expects fourth quarter base earnings per diluted share to be in a range of $0.84 to $0.90 and full-year base earnings per diluted share to be in a range of $3.49 to $3.55. Full-year 2021 cash flow from operations is expected to be between $520 million to $550 million and full-year 2021 free cash flow is unchanged from previous guidance at $270 million to $300 million.
Positive Outlook
- Demand for products across most businesses remains strong despite supply chain challenges.
- Consumer Packaging segment to continue benefiting from elevated at-home eating trends.
- Demand for global Industrial Paper Packaging products has recovered to pre-pandemic levels.
- Opportunities for new product growth such as fiber protective post business expanding into Poland, Turkey and Mexico.
- Cold-chain packaging business has picked up significant new orders for transporting COVID-19 vaccines.
Challenges Ahead
- Cost inflation expectations have grown and project certain raw materials, energy, freight, packaging and other costs pressures will continue well into 2022.
- Must continue executing inflation-justified pricing actions across each of businesses and will remain focused on controlling costs.
- The divestiture of display and packaging business.
- Six fewer days than in the prior year period.
- Higher year-end 2021 net working capital balances due to a combination of inflation and increased fourth-quarter business activity, as well as the timing and amount of tax payments.
Revenue & Expenses
Visualization of income flow from segment revenue to net income