Amcor’s first-quarter results revealed a slight earnings per share (EPS) beat of 4 per cent, reaching US19.3¢ per share, according to RBC Capital Markets analyst Mark Wilson. This figure exceeded market expectations of US18.5¢, and the company reaffirmed its full-year guidance at US$0.80-0.83. Amcor is a global packaging company that develops and manufactures responsible packaging for food, beverage, pharmaceutical, medical, home, and personal care products. The company operates across a multitude of countries to deliver innovative packaging solutions to its customers.
Wilson noted that while the market may initially respond positively to the EPS beat and reaffirmed guidance, the quality of the beat was questionable. He pointed to significant below-the-line items of US$90 million and lower-than-expected depreciation, interest, and tax, suggesting that the earnings boost may not be sustainable. Amcor’s cash flow and balance sheet faced pressure, with net debt increasing to US$14 billion and net leverage climbing to 3.6x.
Furthermore, Wilson highlighted ongoing operational challenges. Volumes experienced a 3 per cent decrease, which is a continuing concern despite the earnings outperformance. The analyst stressed that managing leverage and free cash flow will be key priorities for Amcor moving forward.
Amcor expects net debt/EBITDA of 4.0x and gearing of 3.6x for the quarter. The company has not yet provided specific guidance on how it plans to reduce leverage to its target range of 3.1-3.2x by the end of the 2026 fiscal year.
