ATLANTA - Graphic Packaging (NYSE:GPK) Holding Company (NYSE: GPK), a leading provider of sustainable consumer packaging solutions, reported its first-quarter financial results for 2024, with earnings surpassing analyst expectations but revenue falling below forecasts.
The company posted an adjusted earnings per share (EPS) of $0.66, which was $0.03 higher than the analyst estimate of $0.63. However, revenue for the quarter was $2.26 billion, missing the consensus estimate of $2.38 billion.
Despite the mixed financial outcomes, the company's stock saw a modest increase of +0.36% following the earnings release, indicating a slightly positive market response to the earnings beat. The driver behind the stock's movement was primarily the earnings surpassing analyst predictions.
In comparison to the first quarter of the previous year, Graphic Packaging (NYSE:PKG)'s net sales decreased by 7% from $2.438 billion to $2.259 billion. The decline in revenue was attributed to lower open market sales of paperboard, fewer shipping days, input cost pass-through in Europe, and lower days-adjusted sales. Adjusted EBITDA also saw a decrease, dropping from $484 million in the first quarter of 2023 to $443 million in the same period of 2024.
Michael Doss, the company's President and CEO, commented on the results, stating, "During the first quarter, our diverse consumer packaging portfolio performed broadly as expected. We generated a solid 19.6% Adjusted EBITDA margin and are on track to achieve 2% sales growth from innovation in 2024." He also highlighted the company's strategic initiatives, including the Vision 2030 goals and the construction progress of the Waco, Texas recycled paperboard manufacturing facility.
Looking ahead, Graphic Packaging provided guidance for the full year 2024, expecting an adjusted EPS range of $2.65 to $2.85, which brackets the analyst consensus of $2.74. The company also anticipates adjusted EBITDA to be between $1.73 billion and $1.83 billion for the year.
The company's financial position remains strong, with a net leverage ratio of 3.0x, a slight improvement from the 3.1x reported in the previous year. Capital expenditures for the quarter were $331 million, reflecting an acceleration in project spend for the Waco facility. Additionally, the company announced the pending sale of its Augusta, Georgia bleached paperboard manufacturing facility to Clearwater Paper (NYSE:CLW), expected to close on May 1, 2024, with net proceeds of approximately $550 million.
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