Aptargroup Inc. (ATR) posted first-quarter 2010 results after the closing bell on Thursday. The company recorded a strong 46.3% growth in net income to $39.0 million, or 56 cents per share from $26.7 million, or 38 cents per share in the prior year quarter. Quarterly EPS also topped the Zacks Consensus Estimate of 51 cents per share.
The company has a good track record of beating earnings expectations as it has surpassed the Zacks Consensus Estimate in each of the last 4 quarters with an average positive surprise of 8.9%, or 4 cents. This implies that Aptargroup’s earnings has topped the Zacks Consensus Estimate by 8.9% on an average over the last 4 quarters.
Net sales recorded a growth of 17.1% to $505.5 million from $431.8 million in the year-ago period. The growth was primarily driven by the flagship Beauty & Home segment, which posted a growth of 24.5% to $263.4 million. Aptargroup’s Closures and Pharma divisions also grew by 15.0% and 4.2% to $134.8 million and $107.3 million, respectively.
Gross profit posted a growth 22.7% year-over-year to $174.3 million, while gross margin rose by 160 basis points (bps) to 34.5%. Selling, R&D and administrative expenses, as a percentage of sales, reduced by 100 bps to 15.6% mainly due to effective cost management. Accordingly, operating income surged by 52.0% year-over-year to $61.6 million, while operating margin rose by 280 bps to 12.2%.
Aptargroup ended the quarter with cash and equivalents of $337.8 million and long-term debt of $207.3 million, compared to $203.9 million of cash and $229.7 million of long-term debt in the year-ago quarter. During the quarter, the company repurchased approximately 200,000 shares for a total consideration of $8 million and currently has remaining authorization of 3.5 million shares.
Looking ahead, Aptargroup expects earnings for the second quarter of 2010 to range between 60 cents and 65 cents per share, compared to 41 cents posted in the year-ago quarter. The guidance is in line with the Zacks Consensus Estimate of 60 cents per share, which jumped by 4 cents over the past week.
Meanwhile, the Zacks Consensus Estimate on the company’s full-year earnings has moved up by 3 cents over the past month to $2.23 per share as 2 of 10 covering analysts raised expectations. The most accurate estimate is even bullish at $2.28 per share, indicating a potential upside of 2.2% over the Zacks Consensus Estimate.
Aptargroup is a global supplier of a broad range of dispensing systems for the fragrance/cosmetic, personal care, pharmaceutical, household and food/beverage markets. Headquartered in Crystal Lake, Illinois, the company has manufacturing facilities in North America, Europe, Asia and South America.
Read the full analyst report on “ATR”
Zacks Investment Research
