Berry Plastics Hits 52-Week High on Strong Q2 Results

3 June 2016

Shares of Berry Plastics Group, Inc . BERY reached a new 52-week high of $39.60 on Jun 1, before closing lower at $39.56. This was higher than its previous 52-week high of $38.74, attained a day after the company posted its second-quarter fiscal 2016 (ended Apr 2, 2016) results on May 10.

Over past one-year period, Berry Plastics' share price has ranged from a low of $27.79 on Feb 8, 2016, to a high of $39.60 on Jun 1, 2016. The company has delivered a year-to-date return of 8.26%. Average volume of shares traded over the last three months is approximately 1529K.

Evansville, IN-based Berry Plastics is a manufacturer and distributor of plastic consumer packaging and engineered materials in North America and internationally with a market cap of $4.78 billion. Berry Plastics has impressive long-term estimated earnings per share growth rate of 20%. The company has outperformed the Zacks Consensus Estimate in three of the past 4 quarters, with an average positive earnings surprise of 4.81%.

Growth Drivers

Berry Plastics' share price has been on an upswing ever since it reported its strong second-quarter fiscal 2016 results. Net sales and operating EBITDA results set records for any quarterly period in the company's history. It was also the first time that quarterly income exceeded $300 million and all operating businesses achieved greater than 19% operating EBITDA margins.

Adjusted earnings per share came in at 58 cents in the quarter that improved 38% year over year. Berry Plastics has reaffirmed its fiscal 2016 adjusted free cash flow guidance at $475 million. However, it raised the operating EBITDA guidance for the fiscal by $10 million to $1,190 million. The company remains committed to its debt reduction goal in order to lower overall leverage.

The acquisition of AVINTIV continues to exceed expectations. The assimilation of AVINTIV into Berry Plastics is progressing well. The combination of Berry Plastics and AVINTIV has created a global leader in plastics packaging and engineered specialty materials. This move will help Berry Plastics to expand its global footprint while adding complementary products to its existing product portfolio.

The company will be able to further capitalize on the rapidly growing global markets for hygiene and healthcare products. Based on the progress to date, the company has increased its cost synergy target for the AVINTIV buyout to $80 million from the original estimate of $50 million. It also remains optimistic there will be further advantages in the second half of the year.


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