Amcor's Earnings Meet Estimates in Q2, Revenues Decrease 0.3% Y/Y

Core Viewpoint - Amcor Plc reported second-quarter fiscal 2024 adjusted earnings per share (EPS) of 16 cents, meeting the Zacks Consensus Estimate, with revenues slightly declining year over year due to various unfavorable impacts [1][3]. Financial Performance - Adjusted EPS for the quarter was 16 cents, consistent with the previous year [1] - Net earnings per share, including special items, increased to 11 cents from 9 cents in the prior-year quarter [2] - Revenues decreased by 0.3% year over year to $3.24 billion, missing the Zacks Consensus Estimate of $3.44 billion [3] - The cost of sales fell by 0.6% to $2.62 billion, while gross profit rose by 0.8% to $626 million, resulting in a gross margin of 19.3% [4] - Adjusted operating income increased by 3% to $363 million, with an adjusted operating margin of 11.2% [5] Segment Performance - Flexibles segment net sales rose by 1.2% to $2.51 billion, with a volume increase of 3% [6] - Rigid Packaging segment reported a 5% decline in net sales to $730 million, with a volume decrease of 1% [8] Cash Flow and Balance Sheet - Cash and cash equivalents at the end of the fiscal second quarter were $445 million, down from $588 million at the end of fiscal 2024 [10] - Net debt increased to $6.5 billion from $6.11 billion as of June 30, 2024 [10] Dividend and Guidance - The board declared a quarterly cash dividend of 12.75 cents per share, payable on March 18, 2025 [11] - Adjusted EPS guidance for fiscal year 2025 is projected to be between 72-76 cents, with adjusted free cash flow expected to be $900-$1,000 million [12] Strategic Developments - Amcor announced a merger agreement with Berry Global Group, expected to close in mid-2025, aiming to enhance growth by focusing on faster-growing, better-margin categories [13][15] - The merger is anticipated to yield $650 million in benefits from identified costs, growth, and financial synergies by the end of the third year post-closing [15] Stock Performance - Over the past year, Amcor's shares have increased by 3.7%, compared to the industry's growth of 11.3% [16]