What happened

Has the bubble popped on Sealed Air (SEE -0.39%) stock?

Over the past few days, investors could be forgiven for thinking so. The company, best known as the purveyor of ubiquitous packaging material Bubble Wrap, published a fresh earnings report that fell just short of analyst expectations. The market clearly wasn't in a forgiving mood, as it collectively traded the stock down by more than 11% across this week, according to data compiled by S&P Global Market Intelligence.

So what

On Tuesday, before market open, Sealed Air took the seal off its first-quarter results. These showed that the packaging company's net sales tallied $1.3 billion, representing a 5% year-over-year decline. That figure also represented a miss on the average analyst estimate of $1.36 billion.

As for profitability, it fell at a steeper rate. Under generally accepted accounting principles (GAAP) standards, the line item was $61.9 million, down substantially from the first-quarter 2022 result of $149.2 million. On a non-GAAP (adjusted), per-share basis, Sealed Air netted $0.74 during the period.

The year-ago figure was well higher, at $1.12. The collective prognosticator estimate was $0.77.

Management put a positive spin on developments during the quarter. Sealed Air quoted CEO Ted Doheny as saying, "We continue to execute well despite the anticipated challenging first quarter, driven by the recessionary environment and continued destocking."

Now what

For 2023, Sealed Air is guiding for $5.85 billion to $6.10 billion in net sales; this would represent growth of at least 4% over the 2022 figure. However, this is skewed somewhat by the acquisition -- and coming inclusion in results -- of specialty packaging company Liquibox, which closed this past February. Meanwhile, Sealed Air said that it expects adjusted net income of $3.50 to $3.80 per share.