Greif, Inc. Class A (NYSE: GEF) stock rose 1.26% though the company posted weaker than expected results. In the second quarter 2018, gross profit rose by $13.4 million to $195.3 million, despite being adversely impacted by an increase in transportation costs of $7.0 million. The operating profit increased by $6.2 million to $87.7 million, and operating profit before special items increased by $7.7 million to $92.6 million. Overall, the company has posted the net income of $45.1 million compared to net income of $36.0 million. Further, during the second quarter, cash provided by operating activities decreased by $1.4 million to $58.2 million. Free cash flow has fallen by $11.3 million to $29.9 million.
GEF in the second quarter of FY 18 has reported the adjusted earnings per share of 76 cents, missing the analysts’ estimates for the adjusted earnings per share of 84 cents as per Zacks Investment Research. The company had reported the adjusted revenue of $968.3 million in the second quarter of FY 18, missing the analysts’ estimates for revenue of $976.2 million.
GEF has declared quarterly cash dividends of $0.42 per share on its Class A Common Stock, and $0.63 per share on its Class B Common Stock. The dividends are payable on July 1, 2018, to shareholders of record at the close of business on June 18, 2018.
Meanwhile, GEF has planned to expand its CorrChoice sheet feeder network with the addition of a new facility. The new world class operation will operate a corrugator and a litho-laminator line, consistent with CorrChoice’s strategy to provide the most responsive service available in the industry on complex orders. The new facility will be located in the Mid-Atlantic region, offering easy access to several of Greif’s key markets and is expected to enhance transportation efficiencies for both of Greif’s paper mills. The operation is expected to employ 80 colleagues and will be sized similarly to existing CorrChoice locations.
Additionally, GEF has deployed 3,000 new branded trailers to serve its customers throughout North America. The new modern fleet provides optimized load capacity by increasing the number of containers per trailer by five to 10 percent which reduces the number of trailers on the road. In addition, this allows for safely loading and unloading of the trailers and reducing the man hours needed for customers to unload their shipments. The improved fuel efficiency and dependability of the trailers are environmentally beneficial to the customer with reduced emissions.