ATLANTA - Graphic Packaging (NYSE:GPK) Holding Company (NYSE:GPK) reported mixed financial results for the second quarter of 2024, with adjusted earnings per share (EPS) surpassing analyst expectations, while revenue fell short of estimates.
The company announced a second-quarter adjusted EPS of $0.60, which was $0.04 higher than the analyst consensus of $0.56. However, revenue for the quarter was $2.24 billion, slightly below the consensus estimate of $2.26 billion.
The packaging company's net sales saw a 6% decline from the same quarter last year, dropping from $2.392 billion in 2023 to $2.237 billion in 2024. This decrease was attributed to the divestiture of the Augusta, GA bleached paperboard manufacturing facility and reduced open market sales participation, which accounted for an $83 million reduction, and a net decline in sales from packaging operations of $73 million, primarily due to price and mix.
Despite the revenue shortfall, Graphic Packaging (NYSE:PKG)'s net income increased to $190 million, or $0.62 per diluted share, up from $150 million, or $0.49 per diluted share in the second quarter of 2023. The company's adjusted EBITDA for the quarter was $402 million compared to $453 million in the prior year, with the adjusted EBITDA margin slightly decreasing to 18.0% from 18.9% in 2023.
President and CEO Michael Doss commented on the quarter's performance, stating, "Second quarter played out largely as expected, with continued strength in Foodservice and Beverage results, and strong execution driving solid Adjusted EBITDA." He also highlighted the company's innovation leadership with the success of Paperseal™ Shape and the strategic move to divest the Augusta facility as steps towards reducing earnings volatility and focusing on sustainable packaging solutions.
Looking ahead, Graphic Packaging has reaffirmed its full-year 2024 guidance, expecting adjusted EBITDA to be between $1.73 billion and $1.83 billion and adjusted EPS to range from $2.65 to $2.85. This guidance aligns closely with the analyst consensus of $2.67 for adjusted EPS.
The company's financial position remains solid with a net leverage ratio of 2.9x, an improvement from 3.0x in the second quarter of 2023. Additionally, Graphic Packaging returned approximately $261 million to shareholders through dividends and share repurchases in the first half of 2024.
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