10.19.18
Sonoco reported financial results for its third quarter, ending Sept. 30, 2018.
Third-quarter 2018 net sales were $1.36 billion, up 3% from $1.32 billion in 2017. Cash flow from operations was $451.5 million in the first nine months of 2018, compared with $281.0 million in 2017. Year-to-date free cash flow was $218.9 million, compared with $25.6 million in 2017. Third-quarter 2018 GAAP earnings per diluted share were $0.72, compared with $0.72 in 2017.
Full-year 2018 operating cash flow and free cash flow guidance have been raised to a range of $580 million to $600 million and $230 million to $250 million, respectively. Previous operating cash flow and free cash flow guidance was a range of $570 million to $590 million and $190 million to $210 million, respectively.
Net sales for the third quarter were $1.36 billion, an increase of $40.1 million, or 3%, from last year’s quarter. The improvement reflects an increase in sales added by acquisitions; higher volumes, particularly in our Display and Packaging businesses; and higher selling prices implemented to recover rising freight and other operating cost inflation.
Gross profits were $259.6 million in the third quarter, an increase of $6.8 million or 2.7%, compared with $252.9 million in the same period in 2017. Gross profit as a percentage of sales was 19%, compared with 19.1% in the same period in 2017.
As of Sept. 30, 2018, total debt was approximately $1.39 billion, compared with $1.45 billion as of Dec. 31, 2017. At the end of the first nine months of 2018, the company had a total-debt-to-total-capital ratio of 43.1%, compared with 45.6% at Dec. 31, 2017. Cash and cash equivalents were $250.4 million as of Sept. 30, 2018, compared with $254.9 million at Dec. 31, 2017.
Operating and free cash flow guidance for 2018 is expected to be in the range of $580 million to $600 million and $230 million to $250 million, respectively. Previous operating cash flow and free cash flow guidance was a range of $570 million to $590 million and $190 million to $210 million, respectively. Stronger than anticipated operating cash flow and proceeds from asset disposals in excess of prior expectations drove these increases in guidance.
“The third quarter certainly presented some challenges for us, not the least of which was the negative impact of Hurricane Florence on our Hartsville mill complex,” said Robert Tiede, Sonoco president and CEO. “Like many companies, we saw and continue to see inflationary cost pressures from higher materials, particularly resins, along with freight, energy and other operating costs. Because of this inflation, we are driving cost recovery through proactive price increases in many of our businesses. Despite challenges, our growth and margin improvement targets for 2018 remain on track. Looking ahead, we are also optimistic about the contribution from our Conitex Sonoco acquisition, which creates opportunities for us to grow our Paper/Industrial Converted Products segment in the fast-growing Asia markets.”
Third-quarter 2018 net sales were $1.36 billion, up 3% from $1.32 billion in 2017. Cash flow from operations was $451.5 million in the first nine months of 2018, compared with $281.0 million in 2017. Year-to-date free cash flow was $218.9 million, compared with $25.6 million in 2017. Third-quarter 2018 GAAP earnings per diluted share were $0.72, compared with $0.72 in 2017.
Full-year 2018 operating cash flow and free cash flow guidance have been raised to a range of $580 million to $600 million and $230 million to $250 million, respectively. Previous operating cash flow and free cash flow guidance was a range of $570 million to $590 million and $190 million to $210 million, respectively.
Net sales for the third quarter were $1.36 billion, an increase of $40.1 million, or 3%, from last year’s quarter. The improvement reflects an increase in sales added by acquisitions; higher volumes, particularly in our Display and Packaging businesses; and higher selling prices implemented to recover rising freight and other operating cost inflation.
Gross profits were $259.6 million in the third quarter, an increase of $6.8 million or 2.7%, compared with $252.9 million in the same period in 2017. Gross profit as a percentage of sales was 19%, compared with 19.1% in the same period in 2017.
As of Sept. 30, 2018, total debt was approximately $1.39 billion, compared with $1.45 billion as of Dec. 31, 2017. At the end of the first nine months of 2018, the company had a total-debt-to-total-capital ratio of 43.1%, compared with 45.6% at Dec. 31, 2017. Cash and cash equivalents were $250.4 million as of Sept. 30, 2018, compared with $254.9 million at Dec. 31, 2017.
Operating and free cash flow guidance for 2018 is expected to be in the range of $580 million to $600 million and $230 million to $250 million, respectively. Previous operating cash flow and free cash flow guidance was a range of $570 million to $590 million and $190 million to $210 million, respectively. Stronger than anticipated operating cash flow and proceeds from asset disposals in excess of prior expectations drove these increases in guidance.
“The third quarter certainly presented some challenges for us, not the least of which was the negative impact of Hurricane Florence on our Hartsville mill complex,” said Robert Tiede, Sonoco president and CEO. “Like many companies, we saw and continue to see inflationary cost pressures from higher materials, particularly resins, along with freight, energy and other operating costs. Because of this inflation, we are driving cost recovery through proactive price increases in many of our businesses. Despite challenges, our growth and margin improvement targets for 2018 remain on track. Looking ahead, we are also optimistic about the contribution from our Conitex Sonoco acquisition, which creates opportunities for us to grow our Paper/Industrial Converted Products segment in the fast-growing Asia markets.”