An unexpected thing happened when Berry Global Group Inc. announced it would close at least 15 plants while also revealing that sales declined nearly 13 percent in its second fiscal quarter. Rather than seeing share prices for the publicly traded packaging company fall on news that would seem to be bad, however, its stock value went up.
In fact, Berry's share price climbed $4 — 7 percent — in the days after it said it would trim its manufacturing footprint.
To begin with, if I understood exactly why the stock market rises and falls, I'll be in another career. So that's one big caveat out of the way. Beyond that, all we can do is point at another number released in its quarterly earnings. Berry posted earnings per share of $1.96. That's more than expected. PN correspondent Jeannie Reall notes that the Zacks Consensus Estimate was that Berry would see earnings per share of $1.85.
And PN Economics Editor Bill Wood says investors may be reacting to something they see beyond short-term issues with slowing demand, destocking and pricing uncertainties.
"If things go as well as they might hope over the next year or so, they are in position to invest in growth and take advantage of the next upturn," Bill noted. "If things do not go as well as we all hope, they are in position to weather the storm."