SEE's Q2 Earnings Beat Estimates, Sales Dip Y/Y on Lower Volumes

Sealed Air Corporation SEE reported second-quarter 2025 adjusted earnings per share of 89 cents, which surpassed the Zacks Consensus Estimate of 72 cents. The bottom line marked a 7% improvement year over year, attributed to improved operating leverage and continued business optimization.

Including one-time items, earnings in the quarter were 64 cents per share compared with 67 cents in the year-ago quarter.

Sealed Air’s Q2 Sales Dip Y/Y on Lower Volumes

Total sales were $1.335 billion in the reported quarter, which beat the Zacks Consensus Estimate of $1.318 billion. Sales were down 0.7% year over year. 

Pricing had a favorable impact of 0.5% and volumes were down 1.8% year over year. Currency had a positive impact of 0.5%. Our model predicted that pricing to impact sales favorably by 0.1% and a volume decline of 1.7%.

SEE’s Q2 EBITDA Margins Grow Y/Y on Lower Costs

The cost of sales was flat year over year at $929 million. The gross profit was $406 million, which marked a 2% decrease from the year-ago quarter’s $416 million. The gross margin contracted 50 basis points to 30.4% from the year-ago quarter.

SG&A expenses were $184 million, 3.2% lower than $190 million in the year-ago quarter. 

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were around $27693 million in the quarter, which rose 3% from the year-ago period. The improvement was attributed to lower operating costs driven by productivity benefits, including savings from the CTO2Grow Program, partially offset by unfavorable net price realization, lower volume and unfavorable impacts from currency translation. 

The adjusted EBITDA margin was 21.9% compared with the year-ago quarter’s 21.2%.

Sealed Air’s Q2 Segment Performance

Food: Net sales inched up 0.3% year over year to $896 million. The figure surpassed our estimate of $891 million. Pricing actions had a favorable impact of 2%, while volumes were down 1%. We expected volume to be down 0.2% and pricing growth of 0.5%. 

Adjusted EBITDA was around $210 million, up 2.6% from the prior-year quarter, aided by lower operating costs driven by productivity benefits, including the CTO2Grow Program, slightly favorable net price realization, partially offset by lower volume. The reported figure surpassed our estimate of $206 million. 

Protective: The segment recorded net sales of $439 million in the quarter under review, down 2.7% from the year-ago quarter. We expected net sales of $424 million. 

Currency had a favorable impact of 1%. Pricing had a negative effect of 2%, whereas volumes fell 2% resulting from the remaining impact of prior-year customer churn in the fulfillment portfolio, somewhat offset by growth in the industrial portfolio 

Our model predicted a negative currency impact of 0.7% and pricing to impact net sales by 0.6%. We expected volume to fall 4.8% in the quarter. 

The segment’s adjusted EBITDA decreased 5% year over year to $78 million, due to unfavorable net price realization, partially offset by lower operating costs driven by productivity benefits, including the CTO2Grow Program. We expected adjusted EBITDA to be $67.2 million.

SEE’s Cash Flow & Balance Sheet Updates

Cash flow generated from operating activities was around $168.5 million in the first half of 2025, lower than $313 million in the prior-year comparable period.  

The company paid out cash dividends of $60 million in the first half of 2025. 

As of June 30, 2025, Sealed Air’s total debt was $4.34 billion compared with $4.4 billion as of Dec. 31, 2024. As of the end of the second quarter of 2025, the company had $1.2 billion of liquidity available, which comprised $354 million in cash and $830 million of undrawn, committed credit facilities.

SEE’s 2025 Guidance

Sealed Air expects net sales of $5.1-$5.5 billion. The midpoint of the range suggests a 2% dip from net sales of $5.39 billion in 2024.

Adjusted EBITDA is projected at $1.075-$1.175 billion for 2025. Adjusted earnings per share are forecast to be $2.90-$3.30. SEE’s adjusted earnings per share were $3.14 in 2024. The free cash flow for the year is expected to be in the range of $350-$450 million.

Sealed Air’s Share Price Performance 

In the past year, the company’s shares have lost 16.8% compared with the industry’s 11.2% decline.

SEE’s Zacks Rank

Sealed Air currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did Sealed Air’s Industry Peers Fare in Q2? 

Avery Dennison Corporation AVY has delivered adjusted earnings of $2.42 per share in second-quarter 2025, beating the Zacks Consensus Estimate of $2.38. The bottom line was flat year over year. 

Avery Dennison’s total revenues dipped 0.7% year over year to $2.22 billion, marginally missing the Zacks Consensus Estimate of $2.23 billion. 

AptarGroup ATR came out with quarterly earnings of $1.66 per share, beating the Zacks Consensus Estimate of $1.58 per share. This reflects a 21.2% increase in earnings from $1.37 per share reported a year ago. 

AptarGroup reported revenues of $966 million for the quarter, surpassing the Zacks Consensus Estimate of $946 million. The figure was 6% higher than the year-ago quarter. 

Packaging Corporation of America PKG reported adjusted earnings per share of $2.48 in the second quarter of 2025, beating the Zacks Consensus Estimate of $2.44. The reported figure was higher than Packaging Corp.’s guidance of $2.41 in the quarter under review. Moreover, the bottom line increased 13% year over year. The upside was driven by higher prices and mix in both segments.

Packaging Corp.’s sales in the second quarter grew 4.6% year over year to $2.17 billion. The top line beat the Zacks Consensus Estimate of $2.16 billion.  

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This article originally published on Zacks Investment Research (zacks.com).

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