Silgan Holdings Inc.'s purchase of WestRock Co.'s specialty closures and dispensing business earlier this year already has the company boosting earnings expectations for the year.
Stamford, Conn.-based Silgan, which calls the newly acquired operations its dispensing systems business, is now forecasting adjusted net income per diluted share of $3.20 to $3.40 per share, up from the previous range of $3.15 to $3.35.
The "favorable impact" of the acquisition is partially offset by higher average interest rates, the company said in releasing first quarter results.
Silgan, during a conference call, also stuck with its earlier estimate of $15 million of improvement in its plastic containers business this year.
"The target for this year was delivering that $15 million and that's exactly what the business is focused on and that's a substantial change year over year. So the good news is we're confident and we're on track to deliver that $15 million," Chief Operating Officer Adam Greenlee said.
"In Q1, we've had five consecutive quarters of improved performance," he said, in the plastic containers business.
Silgan has been reorganizing its plastics containers business over the past couple of years.
Silgan purchased the dispensing systems business for $1 billion in a deal that included 13 plants in North America, Europe, South America and Asia making triggers, pumps, sprayers and dispensing closures for home, health and beauty products companies.
The company said it has seen some early ways the plastic containers business and the dispensing systems business can work together and anticipates more synergies will play out in the future.
Silgan had a profit of $23.2 million, or 42 cents per diluted share, on sales of $805.4 million during the first quarter. That compares with a profit of $26.6 million, or 44 cents per share, on sales of $792.7 million for the first quarter of 2016.
Adjusted net income per diluted share was 62 cents for the first quarter of 2017, compared with adjusted net income of 45 cents per diluted share for last year's first quarter.
Silgan, along with plastic containers and dispensing systems, also makes both plastic and metal closures and metal containers.