What Happened?
Shares of household products company Reynolds (NASDAQ: REYN) jumped 6.2% in the afternoon session after the company reported strong third-quarter financial results that exceeded analyst expectations and raised its full-year profit forecast.
The household products company posted revenue of $931 million, up 2.3% year-over-year and beating analyst estimates. Profitability was a significant highlight, with adjusted earnings per share (EPS) of $1.05, dramatically outperforming the consensus estimate of $0.39. Buoyed by the strong results, Reynolds increased its full-year adjusted EPS guidance to $1.62 at the midpoint. Adding to the positive sentiment, the company's revenue guidance for the next quarter of $1.05 billion was surprisingly strong, coming in 6.3% above what analysts were forecasting.
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What Is The Market Telling Us
Reynolds’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 6.2% on the news that the company reported second-quarter results that beat Wall Street estimates for both revenue and adjusted earnings per share. The maker of Hefty bags and Reynolds Wrap posted adjusted earnings of $0.39 per share on revenue of $938 million, which exceeded analyst forecasts. However, the positive results were tempered by other figures. The company’s net income declined to $73 million from $97 million in the same quarter last year, reflecting higher costs. Furthermore, Reynolds reaffirmed its full-year 2025 guidance, which projected a low single-digit decline in net revenues compared to the prior year. The company's forecast for the third quarter was also in line with consensus, offering no significant upside surprise to investors.
Reynolds is down 6.8% since the beginning of the year, and at $24.99 per share, it is trading 15.3% below its 52-week high of $29.52 from October 2024. Investors who bought $1,000 worth of Reynolds’s shares 5 years ago would now be looking at an investment worth $878.38.
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