Sealed Air(US:SEE) ZACKSยท2025-08-05 18:01Core Insights - Sealed Air Corporation (SEE) reported adjusted earnings per share of 89 cents for Q2 2025, exceeding the Zacks Consensus Estimate of 72 cents, reflecting a 7% year-over-year improvement due to better operating leverage and business optimization [1][8] - Total sales for the quarter were $1.335 billion, surpassing the Zacks Consensus Estimate of $1.318 billion, but down 0.7% year over year, with pricing positively impacting sales by 0.5% and volumes declining by 1.8% [2][8] - Adjusted EBITDA for the quarter was approximately $276.93 million, a 3% increase from the previous year, driven by lower operating costs and productivity benefits, resulting in an adjusted EBITDA margin of 21.9% [4][8] Financial Performance - The cost of sales remained flat at $929 million, while gross profit decreased by 2% to $406 million, leading to a gross margin contraction of 50 basis points to 30.4% [3] - Selling, General and Administrative (SG&A) expenses were reduced to $184 million, down 3.2% from $190 million in the prior year [3] - The Food segment reported net sales of $896 million, a slight increase of 0.3% year over year, while the Protective segment saw a decline in net sales to $439 million, down 2.7% [5][6] Segment Analysis - In the Food segment, adjusted EBITDA rose by 2.6% to around $210 million, supported by lower operating costs, while the Protective segment's adjusted EBITDA fell by 5% to $78 million due to unfavorable net price realization [6][9] - Currency fluctuations had a favorable impact of 1% on sales, while pricing negatively affected sales by 2% and volumes fell by 2% due to prior-year customer churn [7][8] Cash Flow and Balance Sheet - Cash flow from operating activities was approximately $168.5 million in the first half of 2025, a decrease from $313 million in the same period last year [10] - As of June 30, 2025, total debt stood at $4.34 billion, with $1.2 billion in available liquidity, including $354 million in cash and $830 million in undrawn credit facilities [11] Guidance and Market Performance - Sealed Air expects net sales for 2025 to be between $5.1 billion and $5.5 billion, indicating a potential 2% decline from 2024 sales of $5.39 billion [12] - Adjusted EBITDA is projected to be between $1.075 billion and $1.175 billion, with adjusted earnings per share forecasted at $2.90 to $3.30, compared to $3.14 in 2024 [12] - Over the past year, Sealed Air's shares have decreased by 16.8%, compared to an 11.2% decline in the industry [13]