AptarGroup, Inc. Returns to Growth

By Steve SymingtonMarketsFool.com

AptarGroup Inc. (NYSE: ATR) announced first-quarter 2017 results on Thursday after the market closed, punctuated by a return to core sales growth thanks to strength in its beauty-and-home and pharma businesses. When all was said and done on Friday, shares of the consumer-packaging specialist climbed almost 2%.

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Let's break the seal, then, and have a closer look at what drove AptarGroup's business as it rang in the new year, as well as what we should expect from the company going forward.

Image source: AptarGroup.

AptarGroup results: The raw numbers

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Metric

Q1 2017

Q1 2016

Year-Over-Year Growth

Revenue

$601.3 million

$582.3 million

3.3%

GAAP net income

$51.8 million

$43.9 million

18%

GAAP earnings per diluted share

$0.81

$0.67

20.9%

Data source: AptarGroup..

What happened with AptarGroup this quarter?

  • Adjusting for special items and currency changes, net income climbed 9.5% from comparable earnings of $0.74 per share in last year's first quarter.
  • Both years' Q1 earnings also included a $0.04-per-share tax benefit not included in previous guidance. Even so, AptarGroup's results would have arrived at the high end of guidance provided last quarter for earnings per share of $0.72 to $0.77.
  • Revenue by segment included:
  • 3% growth in the beauty-and-home segment, including 1% core sales growth, 3% from acquisitions, and a 1% headwind from foreign currency exchange.
  • 8% growth from pharma, including 10% core sales growth, 1% from acquisitions, and a 3% headwind from currencies.
  • a 3% decline in the food-and-beverage segment, including a 1% decline in core sales and a 2% headwind from currencies.
  • AptarGroup continues to invest in connected electronic drug-delivery devices. Notable developments this quarter included:
  • Receiving the first order for Aptar's eLockout, the first integrated electronic nasal lockout device approved by the European Medicines Agency. This marked a major milestone after a multi-year development process with Takeda Pharmaceuticals.
  • Agreeing to acquire a 20% minority stake in Kali Care, which specializes in digital-monitoring systems for ophthalmic medications.

What management had to say

AptarGroup CEO Stephen Tanda stated:

Looking forward

For the current quarter, AptarGroup expects to achieve growth in both its pharma and food-and-beverage segments, while the beauty-and-home segment faces uncertainties primarily surrounding economic growth rates in the U.S. and Brazil.On the bottom line, Aptar group anticipates earnings per share in the second quarter of $0.92 to $0.97, up from comparable adjusted earnings of $0.87 per share in the same year-ago period.

All things considered, this was a strong quarter from AptarGroup as it successfully weathered last year's difficult market conditions. And though similar uncertainties may crop up in the future, with shares up more than 9% so far in 2017 as of this writing, I think investors should be pleased with where AptarGroup stands today.

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Steve Symington has no position in any stocks mentioned. The Motley Fool recommends AptarGroup. The Motley Fool has a disclosure policy.