July 22, 2021-- Sonoco(NYSE: SON), one of the largest diversified global packaging companies, today reported financial results for its second quarter ended July 4, 2021.
Second Quarter Highlights
- Second quarter 2021 GAAP net loss per diluted share was
$(3.34), compared with earnings per diluted share of $0.55in 2020.
- Second quarter 2021 GAAP net loss included net after-tax charges of
$418.7 million, due mostly to a non-cash pension settlement charge of $406.5 millionrelated to the Company's settlement of the outstanding pension liabilities of the Sonoco Pension Plan for Inactive Participants (the "Inactive Plan"), and a $15.0 millionexpense related to the early extinguishment of debt. In the second quarter of 2020, GAAP earnings included net after-tax charges of $24.9 millionrelated mostly to restructuring actions and non-operating pension costs.
- Base net income attributable to
Sonoco(base earnings) for second quarter 2021 was $0.84per diluted share, compared with $0.79in 2020. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.) Sonocopreviously provided second quarter 2021 base earnings guidance of $0.82to $0.88per diluted share.
- Second quarter 2021 net sales were
$1.38 billion, compared with $1.25 billionin 2020.
- Cash flow from operations was
$102.0 millionin the first half of 2021, compared to $282.0 millionin the first half of 2020. Free cash flow was $9.4 millionin the first half of 2021, compared with $210.4 millionin the first half of 2020. Free cash flow for the first half of 2021 included pension contributions totaling $133 millionmade in the second quarter as part of the final settlement of the Inactive Plan's liabilities. (See free cash flow definition and reconciliation to cash flow from operations later in this release.)
July 8, 2021, the Company committed to reduce absolute scope 1 and 2 greenhouse gas emissions by 25 percent and scope 3 greenhouse gas emissions by 13.5 percent by 2030 in line with the Paris Climate Agreement — to limit global temperatures to warming to well below 2-degree C. These emission reduction goals were validated by the Science Based Targets initiative (SBTi).
2021 Third Quarter and Full-Year Guidance
Sonocoexpects third quarter base earnings per diluted share to be in a range of $0.87to $0.93and expects full-year base earnings per diluted share to be in a range of $3.50to $3.60. This full-year outlook is unchanged from previous guidance. Third quarter and full-year base earnings per diluted share in 2020 were $0.79and $3.41, respectively.
- Excluding the
$133 millionof cash contributions to the Inactive Plan, full-year 2021 cash provided from operations and free cash flow guidance remains unchanged in a range of $570 millionto $600 millionand $270 millionto $300 million, respectively.
Note: Third-quarter and full-year 2021 GAAP guidance is not provided in this release due to the likely occurrence of one or more of the following, the timing and magnitude of which we are unable to reliably forecast: restructuring costs and restructuring-related impairment charges, acquisition/divestiture-related costs, gains or losses on the sale of businesses or other assets, and the income tax effects of these items and/or other income tax-related events. These items could have a significant impact on the Company's future GAAP results.
Commenting on the Company’s second quarter performance,
"While we expected demand in our
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