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Amcor Meets Earnings Estimates in Q3, Closes Berry Global Merger
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Amcor Plc (AMCR - Free Report) reported third-quarter fiscal 2025 (ended March 31, 2025) adjusted earnings per share (EPS) of 18 cents, in line with the Zacks Consensus Estimate as well as the year-ago quarter’s figure. Amcor has also successfully closed the merger with Berry Global Group, Inc., strengthening its position as a global leader in consumer and healthcare packaging solutions.
Including special items, the company reported net earnings per share of 13.60 cents compared with 12.90 cents in the prior-year quarter.
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Amcor’s revenues dipped 2.3% year over year to $3.33 billion. The top line missed the Zacks Consensus Estimate of $3.49 billion.
While volumes were in line with last year, price/mix contributed slightly positively to net sales. The overall decline was attributed to the unfavorable impact of approximately 2% related to foreign exchange rates and a 1% negative impact from items affecting comparability, which were offset by a favorable impact of approximately 1% related to the pass-through of higher raw material costs.
Amcor’s Margins Contract Y/Y in Q3
The cost of sales was down 1.5% year over year to $2.68 billion. Gross profit declined 5.5% year over year to $654 million. The gross margin was 19.6%, a 70-basis point contraction from the year-ago quarter’s 20.3% on lower sales.
Selling, general & administrative expenses were $27 million, up 8% year over year. The company reported an operating income of $313 million in the fiscal third quarter compared with $307 million in the year-ago quarter.
Adjusted operating income was $384 million, down 3% from $397 million in the prior-year quarter. It was 0.4% higher than last year on a comparable constant currency basis, with benefits from continued strong cost performance partly offset by unfavorable earnings impacts from price/mix. The adjusted operating margin was 11.5% compared with 11.6% in the prior-year quarter.
Adjusted EBITDA was $477 million, 4% lower than the figure of $499 million in the prior-year quarter. Adjusted EBITDA margin was 14.3% compared with 14.6% in the year-ago quarter.
AMCR’s Segment Performances in Q3
Flexibles: Net sales inched up 0.3% year over year to $2.6 billion. Volume rose 1% year over year. However, unfavorable movements in foreign exchange rates and impacts related to the pass-through of higher raw material costs had an offsetting impact on net sales of approximately 2%.
Our model projected net sales of $2.67 billion and 4.9% year-over-year volume growth.
Adjusted operating income dipped 0.3% year over year to $357 million. It was 2% higher than last year on a comparable constant currency basis, driven by higher volumes and strong cost performance, partly offset by unfavorable earnings impacts from price/mix. We expected an adjusted operating income of $362 million.
Rigid Packaging: The segment reported net sales of $728 million, down 10.5% from the prior-year quarter. Volume was down 2% year over year. An unfavorable price/mix impact of 1% and a negative 2% impact related to movements in foreign exchange rates were offset by a favorable impact of approximately 1% related to the pass through of higher raw material costs. The segment’s results in the quarter were also impacted by 6% due to the divestment of Amcor's 50% interest in the Bericap Joint Venture in December 2024.
We expected net sales of $845 million and a volume increase of 4.1% from the prior-year quarter.
Adjusted operating income was $55 million, 22.5% lower than the year-ago quarter. It was 12% lower than last year on a comparable constant currency basis, reflecting lower volumes and unfavorable price/mix, partly offset by cost benefits. Our prediction for the segment’s operating income was $72 million.
Amcor’s Cash Flow & Balance Sheet Updates
At the end of the fiscal third quarter, Amcor had $2.05 billion of cash and cash equivalents compared with $588 million as of fiscal 2024-end. The company generated $276 million of cash in operating activities in the first nine months of fiscal 2025 compared with $378 million in the year-ago comparable period.
As of March 31, 2025, Amcor’s net debt totaled $6.75 billion, up from $6.11 billion as of June 30, 2024.
AMCR Lowers Guidance for FY25
Adjusted EPS is expected has been lowered to 72-74 cents from the earlier expectation of 72-76 cents. The company projects an adjusted free cash flow of $900-$1,000 million.
Amcor & Berry Global Merger Offers 35% EPS Accretion by FY28
The combination of Amcor and Berry Global strengthens the former’s market position, expanding its product offerings and enhancing its position in attractive categories.
In fiscal 2026, the company expects to realize $260 million in pre-tax synergies, driving approximately 12% adjusted EPS accretion. Over the next three years, Amcor projects $650 million in total benefits from cost savings, growth opportunities and financial synergies, which are anticipated to deliver more than 35% EPS accretion by the end of FY28.
With projected annual cash flow exceeding $3 billion by FY28, Amcor will be well-positioned to invest in organic growth, pursue strategic M&A and return capital to shareholders through attractive dividends and share repurchases.
Amcor’s Price Performance
In the past year, AMCR shares have dipped 6.2% compared with the industry’s 11.4% fall.
Crown Holdings, Inc. (CCK - Free Report) reported first-quarter 2025 adjusted EPS of $1.67, beating the Zacks Consensus Estimate of $1.22 by a solid margin of 37%. The bottom line marked a 64% improvement year over year, attributed to higher beverage can shipments across the Americas and Europe, enhanced manufacturing efficiencies and cost savings from Crown Holdings’ restructuring initiatives.
Crown Holdings’ net sales in the quarter totaled $2.89 billion, surpassing the Zacks Consensus Estimate of $2.87 billion. The figure also marked an improvement of 3.7% from the year-ago quarter’s $2.78 billion.
Packaging Corporation of America (PKG - Free Report) reported adjusted EPS of $2.31 in the first quarter of 2025, beating the Zacks Consensus Estimate of $2.21. The bottom line increased 34% year over year. The upside primarily resulted from higher prices and mix in the Packaging and Paper segments and volumes in the Packaging segment. Including one-time items, earnings in the reported quarter were $2.26 per share compared with the prior-year quarter’s $1.63.
Packaging Corp.’s sales in the first quarter rose 8.2% year over year to $2.141 billion. The top line surpassed the Zacks Consensus Estimate of $2.140 billion.
Silgan Holdings (SLGN - Free Report) reported a record first-quarter 2025 adjusted EPS of 82 cents per share, which beat the Zacks Consensus Estimate of 78 cents. This marked a 19% increase from EPS of 69 cents in the year-ago quarter. This was attributed to volume growth and outstanding operating performance across all segments, contribution from the Weener acquisition and savings from its cost reduction program.
Silgan’s first-quarter 2025 sales rose 11% year over year to $1.467 billion, missing the Zacks Consensus of $1.471 billion.
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Amcor Meets Earnings Estimates in Q3, Closes Berry Global Merger
Amcor Plc (AMCR - Free Report) reported third-quarter fiscal 2025 (ended March 31, 2025) adjusted earnings per share (EPS) of 18 cents, in line with the Zacks Consensus Estimate as well as the year-ago quarter’s figure. Amcor has also successfully closed the merger with Berry Global Group, Inc., strengthening its position as a global leader in consumer and healthcare packaging solutions.
Including special items, the company reported net earnings per share of 13.60 cents compared with 12.90 cents in the prior-year quarter.
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Amcor PLC Price, Consensus and EPS Surprise
Amcor PLC price-consensus-eps-surprise-chart | Amcor PLC Quote
AMCR Witnesses Decline in Revenues in Q3
Amcor’s revenues dipped 2.3% year over year to $3.33 billion. The top line missed the Zacks Consensus Estimate of $3.49 billion.
While volumes were in line with last year, price/mix contributed slightly positively to net sales. The overall decline was attributed to the unfavorable impact of approximately 2% related to foreign exchange rates and a 1% negative impact from items affecting comparability, which were offset by a favorable impact of approximately 1% related to the pass-through of higher raw material costs.
Amcor’s Margins Contract Y/Y in Q3
The cost of sales was down 1.5% year over year to $2.68 billion. Gross profit declined 5.5% year over year to $654 million. The gross margin was 19.6%, a 70-basis point contraction from the year-ago quarter’s 20.3% on lower sales.
Selling, general & administrative expenses were $27 million, up 8% year over year. The company reported an operating income of $313 million in the fiscal third quarter compared with $307 million in the year-ago quarter.
Adjusted operating income was $384 million, down 3% from $397 million in the prior-year quarter. It was 0.4% higher than last year on a comparable constant currency basis, with benefits from continued strong cost performance partly offset by unfavorable earnings impacts from price/mix. The adjusted operating margin was 11.5% compared with 11.6% in the prior-year quarter.
Adjusted EBITDA was $477 million, 4% lower than the figure of $499 million in the prior-year quarter. Adjusted EBITDA margin was 14.3% compared with 14.6% in the year-ago quarter.
AMCR’s Segment Performances in Q3
Flexibles: Net sales inched up 0.3% year over year to $2.6 billion. Volume rose 1% year over year. However, unfavorable movements in foreign exchange rates and impacts related to the pass-through of higher raw material costs had an offsetting impact on net sales of approximately 2%.
Our model projected net sales of $2.67 billion and 4.9% year-over-year volume growth.
Adjusted operating income dipped 0.3% year over year to $357 million. It was 2% higher than last year on a comparable constant currency basis, driven by higher volumes and strong cost performance, partly offset by unfavorable earnings impacts from price/mix. We expected an adjusted operating income of $362 million.
Rigid Packaging: The segment reported net sales of $728 million, down 10.5% from the prior-year quarter. Volume was down 2% year over year. An unfavorable price/mix impact of 1% and a negative 2% impact related to movements in foreign exchange rates were offset by a favorable impact of approximately 1% related to the pass through of higher raw material costs. The segment’s results in the quarter were also impacted by 6% due to the divestment of Amcor's 50% interest in the Bericap Joint Venture in December 2024.
We expected net sales of $845 million and a volume increase of 4.1% from the prior-year quarter.
Adjusted operating income was $55 million, 22.5% lower than the year-ago quarter. It was 12% lower than last year on a comparable constant currency basis, reflecting lower volumes and unfavorable price/mix, partly offset by cost benefits. Our prediction for the segment’s operating income was $72 million.
Amcor’s Cash Flow & Balance Sheet Updates
At the end of the fiscal third quarter, Amcor had $2.05 billion of cash and cash equivalents compared with $588 million as of fiscal 2024-end. The company generated $276 million of cash in operating activities in the first nine months of fiscal 2025 compared with $378 million in the year-ago comparable period.
As of March 31, 2025, Amcor’s net debt totaled $6.75 billion, up from $6.11 billion as of June 30, 2024.
AMCR Lowers Guidance for FY25
Adjusted EPS is expected has been lowered to 72-74 cents from the earlier expectation of 72-76 cents. The company projects an adjusted free cash flow of $900-$1,000 million.
Amcor & Berry Global Merger Offers 35% EPS Accretion by FY28
The combination of Amcor and Berry Global strengthens the former’s market position, expanding its product offerings and enhancing its position in attractive categories.
In fiscal 2026, the company expects to realize $260 million in pre-tax synergies, driving approximately 12% adjusted EPS accretion. Over the next three years, Amcor projects $650 million in total benefits from cost savings, growth opportunities and financial synergies, which are anticipated to deliver more than 35% EPS accretion by the end of FY28.
With projected annual cash flow exceeding $3 billion by FY28, Amcor will be well-positioned to invest in organic growth, pursue strategic M&A and return capital to shareholders through attractive dividends and share repurchases.
Amcor’s Price Performance
In the past year, AMCR shares have dipped 6.2% compared with the industry’s 11.4% fall.
Image Source: Zacks Investment Research
AMCR’s Zacks Rank
Amcor currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performances of Other Packaging Stocks
Crown Holdings, Inc. (CCK - Free Report) reported first-quarter 2025 adjusted EPS of $1.67, beating the Zacks Consensus Estimate of $1.22 by a solid margin of 37%. The bottom line marked a 64% improvement year over year, attributed to higher beverage can shipments across the Americas and Europe, enhanced manufacturing efficiencies and cost savings from Crown Holdings’ restructuring initiatives.
Crown Holdings’ net sales in the quarter totaled $2.89 billion, surpassing the Zacks Consensus Estimate of $2.87 billion. The figure also marked an improvement of 3.7% from the year-ago quarter’s $2.78 billion.
Packaging Corporation of America (PKG - Free Report) reported adjusted EPS of $2.31 in the first quarter of 2025, beating the Zacks Consensus Estimate of $2.21. The bottom line increased 34% year over year. The upside primarily resulted from higher prices and mix in the Packaging and Paper segments and volumes in the Packaging segment. Including one-time items, earnings in the reported quarter were $2.26 per share compared with the prior-year quarter’s $1.63.
Packaging Corp.’s sales in the first quarter rose 8.2% year over year to $2.141 billion. The top line surpassed the Zacks Consensus Estimate of $2.140 billion.
Silgan Holdings (SLGN - Free Report) reported a record first-quarter 2025 adjusted EPS of 82 cents per share, which beat the Zacks Consensus Estimate of 78 cents. This marked a 19% increase from EPS of 69 cents in the year-ago quarter. This was attributed to volume growth and outstanding operating performance across all segments, contribution from the Weener acquisition and savings from its cost reduction program.
Silgan’s first-quarter 2025 sales rose 11% year over year to $1.467 billion, missing the Zacks Consensus of $1.471 billion.