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Highlights
- Amcor (AMC) completes early acquisition of Berry Global
- Earnings guidance narrowed after weaker-than-expected Q3
- Q3 volumes stable overall, but softness noted in North America
Global packaging heavyweight Amcor (ASX:AMC) has wrapped up the acquisition of Berry Global ahead of schedule, while simultaneously revising its full-year earnings outlook following a soft third-quarter performance. Despite achieving a modest increase in net income over nine months, the company faced challenges in North American markets due to subdued consumer demand.
Earnings Snapshot
For the nine months ending in March, Amcor reported a 3% rise in net income to US$728 million (A$1.14 billion). However, net sales declined by 2% to US$9.93 billion, reflecting persistent market headwinds. In the latest quarter, net sales were US$3.33 billion, also down 2%, and adjusted earnings per share (EPS) stood at 18 US cents—missing market expectations of 19 cents.
Still, shareholders will see a slight increase in dividends, with the company declaring a quarterly dividend of 12.75 US cents, compared to 12.5 US cents a year earlier. This development places Amcor among established ASX dividend stocks, appealing to income-focused investors.
Acquisition Milestone
A notable strategic highlight for the quarter was the completion of the US$13 billion acquisition of Berry Global. The integration was finalised earlier than projected and is expected to contribute significantly to Amcor’s bottom line in the near term. The company now anticipates US$260 million in pre-tax synergies by FY26, which is projected to lift adjusted EPS by approximately 12%—even before factoring in any underlying business growth.
This development marks a major step in Amcor’s strategy to bolster its footprint and product portfolio globally, particularly in the North American region, which experienced sequential volume softness during the third quarter.
Revised Guidance
In light of Q3 performance and the impact of the Berry merger for the final months of the financial year, Amcor has narrowed its FY guidance. Adjusted EPS is now expected to range between 72 and 74 US cents, down slightly from the previous estimate of 72 to 76 US cents.
Though North America posed challenges, Amcor noted that overall volumes were comparable to last year, with modest share gains helping offset weak demand. Growth remained stable in other regions, especially in the flexibles and rigid packaging segments, which posted low to mid single-digit volume increases.
As part of the ASX200 index, Amcor continues to play a vital role in the global packaging landscape. The early integration of Berry is expected to strengthen its position further, with upcoming synergies set to support a more robust earnings profile in the coming fiscal years.
