Greif Q1 Earnings Miss Estimates, Revenues Increase 5% Y/Y

Core Viewpoint - Greif, Inc. reported disappointing financial results for the first quarter of fiscal 2025, with adjusted earnings per share significantly below expectations, primarily due to increased raw material costs and higher selling, general, and administrative expenses, despite a rise in revenues [1][3]. Financial Performance - Adjusted earnings per share for Q1 fiscal 2025 were 39 cents, missing the Zacks Consensus Estimate of 72 cents, and down 69.3% year over year [1][2]. - Total revenues increased by 5% year over year to $1.27 billion, but fell short of the Zacks Consensus Estimate of $1.30 billion [3]. - The cost of sales rose by 3.7% year over year to $1.02 billion, while gross profit increased by 10.8% to $245.5 million, resulting in a gross margin of 19.4%, up from 18.4% a year ago [3]. Expenses and EBITDA - Selling, general, and administrative expenses rose to $168 million from $146 million in the prior-year quarter [4]. - Adjusted EBITDA for the quarter was $145 million, reflecting a 5.9% year-over-year increase, with an adjusted EBITDA margin of 11.5% compared to 11.4% in the previous year [4]. Segment Performance - Customized Polymer Solutions segment revenues were $295 million, up from $228 million year over year, exceeding projections of $284 million, with adjusted EBITDA of $39.5 million [6]. - Durable Metal Solutions segment revenues decreased by 7.6% to $342 million, missing estimates of $375 million, but adjusted EBITDA slightly increased to $45 million [7]. - Sustainable Fiber Solutions segment revenues grew by 6.2% to $561 million, surpassing estimates of $556 million, although adjusted EBITDA fell to $51.5 million [8]. - Integrated Solutions segment revenues declined to $67 million from $79 million year over year, missing projections of $82 million, with adjusted EBITDA dropping to $8.9 million [9]. Cash and Debt Position - Cash and cash equivalents at the end of Q1 fiscal 2025 were $201 million, up from $179 million a year earlier, while cash used in operating activities was $30.8 million compared to a cash inflow of $4.5 million in the prior-year quarter [10]. - Long-term debt decreased to $2.42 billion from $2.63 billion as of the previous reporting period [10]. Dividend Announcement - Greif's board announced a quarterly cash dividend of 54 cents per share for Class A Common Stock and 81 cents for Class B Common Stock, payable on April 1, 2025 [11]. 2025 Outlook - The company anticipates a low end of adjusted free cash flow for fiscal 2025 to be $245 million and adjusted EBITDA to be at least $710 million, an increase from the previously announced $675 million [12]. Stock Performance - Greif's shares have increased by 0.7% over the past year, compared to a 14.6% growth in the industry [13].