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Dec 31, 2020
Sonoco Q4 2020 Earnings Report
Reported financial results for the fourth quarter and full year, both ending December 31, 2020.
Key Takeaways
Sonoco's fourth-quarter net sales were $1.38 billion, up from $1.31 billion in 2019. Base earnings for the quarter were $0.82 per diluted share, compared with $0.75 in 2019. The company achieved record cash flow from operations and free cash flow in 2020.
Fourth-quarter 2020 GAAP loss per diluted share was $(0.12), compared with GAAP earnings per diluted share of $0.44 in 2019.
Base net income attributable to Sonoco for the quarter was $0.82 per diluted share, compared with $0.75 in 2019.
Fourth-quarter 2020 net sales were $1.38 billion, up from $1.31 billion in 2019.
On November 30, 2020, Sonoco sold its Europe contract packaging business for $120 million in cash, net of working capital and other adjustments.
Sonoco
Sonoco
Sonoco Revenue by Segment
Revenue by Segment
Consumer Packaging Revenue
CapyFin.comIndustrial Paper Packaging Revenue
CapyFin.com Forward Guidance
Sonoco projects full-year 2021 base earnings to be in the range of $3.40 to $3.60 per diluted share and expects first-quarter 2021 base earnings to be in the range of $0.80 to $0.90 per diluted share. Full-year 2021 operating cash flow and free cash flow are expected to be in a range of $570 million to $600 million and $270 million and $300 million, respectively.
Positive Outlook
- Consumer Packaging segment should continue to benefit from consumers' at-home eating habits.
- Demand in Industrial Paper Packaging served markets continues to show sequential improvement.
- Expect solid demand in pharmaceutical and industrial markets.
- Expect demand for cold-chain shipping solutions for FDA-approved COVID vaccines and therapeutics to expand as last-mile distribution systems become more organized.
- Remain confident that Sonoco is well-positioned for when the grip of the pandemic weakens and will continue to invest to reinforce the long-term potential of our core businesses, while remaining committed to returning value to our shareholders.
Challenges Ahead
- Continue to face a negative price/cost relationship due to escalating year-over-year recovered paper, freight and other operating costs.
- The ultimate impact of the COVID-19 pandemic on Sonoco's full-year 2021 results remains uncertain.
- Assuming that global business activity will begin to return to pre-pandemic levels after mid-2021.
- Expect first-quarter 2021 base earnings to be lower compared to the first quarter of 2020, which included earnings from the divested Europe contract packaging business.
- The Company's effective tax rate varies quarter to quarter leading to differences in our expected annual and quarterly effective tax rates.
Revenue & Expenses
Visualization of income flow from segment revenue to net income