2Q18 EPS Misses; Lowering Estimates
- 2Q18 (Sept) adjusted EPS was $1.06 (vs 99 cents last year), 3 cents under our estimate, as better-than-anticipated sales and a lower tax rate were offset by higher costs from continued operating inefficiencies in North America (which management believes are now resolved);
- Given the continued shortfalls and risks associated with the integration of Constantia, for FY18 our EPS estimate is now $3.83 (from $4.00), up 6% from FY17;
- Our FY19, our EPS estimate is now $4.38 (from $4.52), up 14% from our FY18 projection, depending on the success of the Constantia integration (management is anticipating 40 cents-to-50 cents of accretion for the fiscal year).
Multi-Color is a provider of label solutions supporting a number of brands including producers of home and personal care, wine and spirits, food and beverage, healthcare and specialty consumer products. The company serves international brand owners with a range of label technologies in Pressure Sensitive, Cut and Stack, In-Mold, Shrink Sleeve, Heat Transfer, Roll Fed, and Aluminum Labels. The company provides a range of products for the packaging needs of its customers and is a producer of pressure sensitive, in-mold and heat transfer labels, and a manufacturer of cut and stack, roll fed, aluminum and shrink sleeve labels. The company also provides a complement of print methods including rotogravure.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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