Eric Volkman, The Motley Fool
3 min read
In This Article:
-
The company published its second earnings release of the current fiscal year.
-
This pleased investors largely because of a sizable earnings beat.
Veteran industrial company Greif (NYSE: GEF) was a standout on the stock exchange Thursday. Investors, captivated by a very convincing earnings beat in the company's freshly reported second quarter of fiscal 2025, pushed the industrial packing specialist's share price up by nearly 16%. In doing so, Greif not only crushed the S&P 500 index's performance on the day (it landed in the red by 0.5%), but also that of many blue chip stocks.
Greif published those quarterly results just after market close on Wednesday, divulging that its net sales inched up by 1% on a year-over-year basis to hit nearly $1.39 billion. The dynamic was similar on the bottom line, with GAAP net income bumping 0.5% higher to $54.5 million, or $1.22 per share.
Although the consensus analyst estimate for revenue was higher, at $1.42 billion, pundits tracking the stock underestimated profitability. Collectively, they were anticipating Greif would only earn $1.12 per share in net income.
In its earnings release, Greif management indicated a steady-as-she-goes approach to its business. It quoted CEO Ole Rosgaard as saying that "The resilience of our results, supported by deliberate portfolio moves and operational discipline, demonstrates that Greif is well-positioned for success and value creation now and in the future."
Greif cautiously proffered selected guidance for the entirety of this fiscal year, raising the low end of its projection for non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) to $725 million and its adjusted free cash flow to $280 million. Both estimates compare positively to the actual fiscal 2024 results of $694 million and just under $190 million, respectively.
Greif isn't the most exciting company on the scene, but at times, it's the unexciting businesses that produce the most dependably pleasing results. This one does what it does well, and what's more it knows how to keep its investors happy with a relatively high-yield dividend. I think it' s a fine stock to own, even after the post-earnings pop.
Before you buy stock in Greif, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Greif wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
