Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of food and product safety company Sealed Air Corp (NYSE:SEE) jumped as much as 11.5% today after reporting better than expected earnings.
So what: Revenue actually fell 2% in the quarter to $1.97 billion, but was largely in-line with what Wall Street expected. But margins improved by 90 basis points from a year ago and that caused earnings to more than double to $66.3 million, or $0.31 per share. On an adjusted basis, earnings were $0.59 per share, easily topping estimates of $0.47.
Now what: Sealed Air is benefiting, in part, from low input costs, which has helped overcome currency challenges. For 2015, management is expecting sales to fall to $7.4 billion from $7.75 billion in 2014, blamed partly on a 7% negative impact in currency translation. But like Q4, earnings are expected to rise around 12%-17% to $2.08 to $2.18 per share.
That's solid improvement but for a slow to no growth business I think 21 times earnings is too much for investors to pay, so I'll sit out this move today.
Travis Hoium has no position in any stocks mentioned. The Motley Fool owns shares of Sealed Air. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.