Amcor Meets Earnings Estimates in Q3, Closes Berry Global Merger

Core Viewpoint - Amcor Plc reported third-quarter fiscal 2025 adjusted EPS of 18 cents, aligning with expectations and the previous year's figure, while also completing the merger with Berry Global, enhancing its market position in consumer and healthcare packaging solutions [1][14]. Financial Performance - Revenues decreased by 2.3% year over year to $3.33 billion, missing the Zacks Consensus Estimate of$3.49 billion [2]. - The cost of sales fell by 1.5% year over year to $2.68 billion, with gross profit declining by 5.5$654 million, resulting in a gross margin of 19.6%, down from 20.3% [4]. - Adjusted operating income was $384 million, down 3$397 million in the prior-year quarter, with an adjusted operating margin of 11.5% compared to 11.6% [5]. - Adjusted EBITDA was $477 million, a 4$499 million in the prior-year quarter, with an adjusted EBITDA margin of 14.3% [6]. Segment Performance - Flexibles segment net sales increased by 0.3% year over year to $2.6 billion, with a volume rise of 1$728 million, down 10.5% year over year, with a volume decline of 2% [9]. Cash Flow and Balance Sheet - As of the end of the fiscal third quarter, Amcor had $2.05 billion in cash and cash equivalents, up from$588 million at the end of fiscal 2024 [12]. - Net debt totaled $6.75 billion, an increase from$6.11 billion as of June 30, 2024 [12]. Guidance and Future Outlook - Adjusted EPS guidance for FY25 has been lowered to 72-74 cents from the previous 72-76 cents, with projected adjusted free cash flow of $900-$1,000 million [13]. - The merger with Berry Global is expected to yield 35% EPS accretion by FY28, with anticipated pre-tax synergies of $260 million in fiscal 2026 [14][15]. Market Performance - Over the past year, Amcor's shares have decreased by 6.2%, compared to an 11.4% decline in the industry [17].