Sonoco Reports 4Q, Full-Year 2017 Results

Sonoco reported financial results for its fourth quarter and full year, ending Dec. 31, 2017.
 
Fourth-quarter 2017 GAAP earnings per diluted share were $0.06, compared with $1.04 in 2016; full-year 2017 GAAP earnings per diluted share were $1.74, compared to $2.81 in 2016.
 
Base net income attributable to Sonoco for the quarter was $0.72 per diluted share, compared with $0.62 in 2016. Full-year 2017 base earnings per diluted share were $2.79, compared to $2.72 in 2016. Sonoco previously provided fourth-quarter 2017 base earnings guidance of $0.68 to $0.74 per diluted share and full-year guidance of $2.75 to $2.81.
 
Fourth-quarter 2017 net sales grew to $1.30 billion, up 13.7%, from $1.14 billion in 2016. Full-year 2017 net sales grew 5.3% to a record $5.04 billion, compared to $4.78 billion in 2016.
 
Full-year cash flow from operations was $349.4 million for 2017, compared with $398.7 million in 2016. Free cash flow was $12.6 million, compared with $65.7 million in 2016.
 
Base earnings for the first quarter of 2018 are estimated to be in the range of $0.69 to $0.75 per diluted share, compared to $0.59 per diluted share in the first quarter of 2017.
 
Full-year 2018 operating cash flow and free cash flow have been raised to a range of $560 million to $580 million and $180 million and $200 million, respectively.
 
“Sonoco’s diversified mix of Consumer and Industrial-related businesses drove strong top and bottom lines results in the fourth quarter,” said Jack Sanders, Sonoco president and CEO. “Net sales grew nearly 14% in the quarter and bottom line results (base net income attributable to Sonoco) improved by more than 17% compared to last year. Overall, the current quarter benefited from a positive price/cost relationship and improvement to productivity and volume/mix.
 
“Net sales in our Consumer Packaging segment reached record levels, reflecting a 14.3% increase over the prior year quarter while operating profit grew 20.4%, driven by a positive price/cost relationship, strong productivity and the benefit of acquisitions net of divestitures,” added Sanders. “We were extremely pleased with the performance of our Paper and Industrial Converted Products segment, which delivered record fourth-quarter earnings with sales growing 14.2% and operating profit surging 71.8%, reflecting a positive price/cost relationship, solid volume growth and productivity improvements.”
 
Net sales for the fourth quarter were $1.3 billion, an increase of $156.8 million, or 13.7%, from last year’s quarter. The improvement reflects a net increase in sales aided by acquisitions, net of divestitures; higher selling prices, largely driven by rising raw material prices; solid volume growth; and the positive impact of foreign exchange.
 
GAAP net income attributable to Sonoco in the fourth quarter was $5.7 million, or $0.06 per diluted share, a decrease of $99.2 million, compared with $104.9 million, or $1.04 per diluted share, in 2016. Base earnings in the fourth quarter were $73.4 million, or $0.72 per diluted share, an increase of $10.9 million, compared with $62.5 million, or $0.62 per diluted share, in 2016.
 
Gross profits were $242.4 million in the fourth quarter, an increase of $27.6 million or 12.9%, compared with $214.8 million in the same period in 2016. Gross profit as a percentage of sales was essentially flat at 18.7%.