Sonoco shares fell 1.4% after earnings, a roughly flat reaction. Results reflected weaker-than-expected Consumer Packaging performance, with weather-related food-can volume weakness and higher input costs weighing on earnings.
- Net sales were $2.0 billion, down 4% year over year; excluding the ThermoSafe divestiture, sales were essentially flat.
- Adjusted EBITDA was $352 million, down 9% year over year (down 4% excluding ThermoSafe), with a 17.2% margin. Adjusted EPS of $1.67 declined 13% (7% excluding ThermoSafe).
- Consumer Packaging volume/mix fell 3% year over year, primarily due to hot, dry weather and unfavorable price-cost relationships; management said the segment performed below expectations.
- Industrial sales rose 5%; North American URB trade ton sales increased 10%, and mill utilization was 94%. The PPP program delivered $16 million of savings.
- Input-cost pressure remained substantial: freight costs rose $17 million year over year, OCC increased $25 per ton during the quarter and was 90% higher than a year earlier, and URB production costs rose more than $60 per ton year over year.
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