What Happened?
Shares of rigid packaging solutions manufacturer Silgan Holdings (NYSE: SLGN) fell 16.7% in the afternoon session after the company reported third-quarter results that met earnings expectations but provided a weak financial outlook for the full year. While the packaging manufacturer's third-quarter adjusted earnings of $1.22 per share matched analyst estimates and its revenue of $2.01 billion surpassed forecasts, investors focused on the lowered guidance. Silgan reduced its full-year adjusted earnings forecast to a midpoint of $3.71 per share, a 6.1% decrease from its previous outlook. This revision, which came alongside an earnings-per-share forecast for the next quarter that also missed expectations, overshadowed the strong quarterly revenue performance and signaled potential challenges ahead.
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What Is The Market Telling Us
Silgan Holdings’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for Silgan Holdings and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 16.5% on the news that the company reported second-quarter results that missed profit expectations and lowered its full-year earnings guidance. The company posted second-quarter adjusted earnings of $1.01 per share, which fell short of the $1.03 per share that analysts had anticipated. While revenue of $1.54 billion slightly topped forecasts, other key metrics disappointed investors. Notably, Adjusted EBITDA, a measure of profitability, came in at $239 million, missing estimates by over 8%. More significantly, Silgan revised its full-year adjusted earnings per share forecast downward to a range of $3.85 to $4.05, from a previous range of $4.00 to $4.20. This reduction in outlook signaled potential future weakness, prompting a significant sell-off in the shares.
Silgan Holdings is down 25.8% since the beginning of the year, and at $37.86 per share, it is trading 34.2% below its 52-week high of $57.53 from November 2024. Investors who bought $1,000 worth of Silgan Holdings’s shares 5 years ago would now be looking at an investment worth $1,083.
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