NEW YORK (TheStreet) -- Sonoco Products (SON - Get Report) shares are up 0.5% to $42.10 in trading on Thursday after its first quarter earnings beat analysts expectations.
The industrial and consumer packaging manufacturer posted a first quarter net income of 52 cents per share, beating Capital IQ's consensus estimate of 51 cents per share.
Net sales for the quarter were $1.19 billion, up slightly from the $1.18 billion it posted in the same quarter last year.
TheStreet Ratings team rates SONOCO PRODUCTS CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate SONOCO PRODUCTS CO (SON) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- SONOCO PRODUCTS CO has improved earnings per share by 26.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, SONOCO PRODUCTS CO increased its bottom line by earning $2.12 versus $1.91 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $2.12).
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 3.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.00, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has slightly increased to $116.74 million or 8.70% when compared to the same quarter last year. In addition, SONOCO PRODUCTS CO has also modestly surpassed the industry average cash flow growth rate of 6.49%.
- You can view the full analysis from the report here: SON Ratings Report