Greif, Inc (NYSE:GEF) Lowered Its 2014 Outlook- Stocks Tumbled Down By 4.5 Percent

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By Stefan Larson on August 27, 2014 Consumer Staples

The share of Greif, Inc (NYSE:GEF) tumbled down by 4.5 percent when the provider of packaging materials reduced its guidance outlook for the year 2014. According to the new outlook, the company expects the earnings to fall in the range of $1.98 and $2.08 per share; previously, the company was expecting an EPS of $2.48 to $2.80 per share.

The company expects its General and Administration costs to surge whereas the figures from operations to drop for the current fiscal year.

The company’s new outlook suggests that Greif, Inc (NYSE:GEF) will report a decline of 24 percent to 28 percent for the current year. It is important to note here that the company reported an EPS of $2.75 for the last fiscal year.

The company, during its second quarter of the year 2014, announced adjusted earnings of 57 cents; the company reported adjusted earnings of 69 cents for the same quarter a year ago. Greif, Inc (NYSE:GEF)saw this decline due to a drop in the sales figures of manufactured goods in the region of Turkey. Figures of Greif, Inc (NYSE:GEF) have also been affected due to the unstable conditions in the industrial packaging and paper packaging sectors of the industry.

The company lowered its earnings to a range of $475 – $505 million before deducting any amortization and depreciation values, taxes and interest rates. The EPS was also lowered before adding the timberland gains of almost $20 million.

The company has been undertaking various actions lately to improve its business portfolio. The company allocated almost $33 million for its goodwill improvement, reducing the balance sheet gains.

The company expects its sales to improve by the next year. As for the year 2014, Greif, Inc (NYSE:GEF) predicts modest sales figures. Greif, Inc (NYSE:GEF) expects the sales figures to improve in the region of Europe, especially in the segment of Industrial Packaging.

The company has also been implementing several strategic plans in the country of Turkey to improve the figures from its Flexible Products sector. The company expects the production of flexible products to go up by the end of the year 2014; hence improving the profitability of the company.

Greif, Inc (NYSE:GEF) is also planning on restructuring its assets in order to boost growth rate. The company plans on selling those assets that are not core to its functions.

The company is based in Delaware and it produces industrial packaging materials, cartons and containerboards. The company operates globally and provides recycling, blending and filling services for a wide variety of products. The company owns a number of timber properties in the region of North America.

Greif, Inc (NYSE:GEF) currently holds a #3 Zacks rank on its stocks, together with a consensus rating of ‘Hold’.

Coming to the stocks prices of Greif, Inc (NYSE:GEF), the company, on the last trading day, August 26, 2014, started its stocks at a price of $48.22 and close at a price of $49.47, after hitting the highest figures of $49.58. The company has a market capitalization of $2.41 billion with a price to earnings ratio of 16.13.