Sonoco Products sees FY18 base EPS $3.00-$3.10, consensus $3.07
Sonoco is projecting to generate approximately $415 million in cash from operations in 2017 and should spend approximately $190 million on capital investments and $155 million on cash dividends to shareholders, thus leaving free cash flow of approximately $70 million. Sonoco now expects its net-debt-to-EBITDA ratio to be approximately 2.0 times at year-end 2017. The increased debt ratio is primarily due to the $230 million acquisition of Peninsula Packaging, Inc., a thermoforming business, in March 2017, and the $170 million acquisition of Clear Lam Packaging, Inc., a flexible packaging business, in July 2017. For 2018, Sonoco is projecting cash from operations to be approximately $532 million and free cash flow to be about $150 million, after spending $220 million in capital investments and paying $162 million in dividends to shareholders. Depreciation and Amortization is projected to be $239 million in 2018. The Company expects free cash flow to more than double from 2017 due primarily to higher projected GAAP earnings and lower expected pension contributions, partially offset by higher capital expenditures and the historic practice of increasing cash dividends to shareholders.