Bemis Cuts 2017 Outlook

(RTTNews) - Bemis Company Inc. (BMS) said that it cut outlook for 2017 due to impact of the sharp contraction and tough economic environment in Brazil.

For 2017, the company now expects adjusted earnings per share to be in the range of $2.35 to $2.50, and GAAP earnings per share of $2.00 to $2.15, excluding impact of items. Analysts polled by Thomson Reuters expected the company to report earnings of $2.55 per share. Analysts' estimates typically exclude special items. Previously, the company expected adjusted earnings per share of $2.50 to $2.60, and GAAP earnings per share of $2.44 to $2.54 for the full year 2017, excluding the impact of items.

Austen stated, "Our guidance reduction is a result of the impact of the sharp contraction and tough economic environment in Brazil. As consumers and retailers scale back, our volumes and mix of business suffer. While we are working to take costs out of our business, the unfavorable headwinds in Brazil will pressure our earnings during the balance of the year."

The company now expects full year 2017 cash from operations to be in the range of $400 to $425 million, primarily a result of revised earnings expectations. This guidance includes the planned impact from initial actions related to the 2017 Restructuring Plan, which is less than $5 million of cash expenditure during 2017.

It now expects capital expenditures for 2017 between $185 and $200 million to support projects underway. It is evaluating future capital spending levels as part of its current comprehensive review of the business.

During June, the Company announced initial details on its restructuring and cost savings plan to improve profitability primarily in its U.S. and Latin American businesses by reducing its manufacturing and administrative cost structure. This plan targets an annual savings run rate of $55 to $60 million, with savings starting in 2017 and fully realized during 2019. Estimated total costs to implement the plan are $100 to $120 million.

As part of this plan, the Company announced that it will close two manufacturing facilities and reduce approximately 300 administrative positions for a combined savings of approximately $30 million, when fully implemented.

The Company continues to evaluate opportunities that build toward its cost savings target of $55 to $60 million and plans to provide final details, including total cash expenditures associated with the cost savings plan, when it releases its third quarter earnings.