SEE Earnings Beat Estimates in Q1, Sales Decline Y/Y on Lower Volumes

Sealed Air Corporation SEE reported first-quarter 2025 adjusted earnings per share of 81 cents, which surpassed the Zacks Consensus Estimate of 67 cents. The bottom line marked a 4% improvement year over year due to lower operating costs and interest expenses, offset by decreased volumes in the Protective segment. 

Including one-time items, earnings in the quarter were 79 cents per share compared with 57 cents in the year-ago quarter.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Sealed Air’s Q1 Sales Dip Y/Y on Lower Volumes

Total sales were $1.272 billion in the reported quarter, which beat the Zacks Consensus Estimate of $1.269 billion. Sales were down 4.3% from $1.33 billion in the first quarter of 2024.

Pricing had unfavorable impacts of 0.1% and volumes were down 1.9% year over year. Currency had a negative impact of 2.3%. Our model predicted pricing to impact sales by 0.8% and a volume decline of 1.4%.

SEE’s Q1 Margins Grow Y/Y on Lower Costs

The cost of sales declined 5% year over year to $881 million. The gross profit was $392 million, which marked a 2% decrease from the year-ago quarter’s $401 million. The gross margin rose 70 basis points to 30.8% from the year-ago quarter. 

SG&A expenses were $191 million, 2.7% higher than $177 million in the year-ago quarter.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were around $276 million in the quarter, which dipped 0.7% from the year-ago period. The decline was attributed to unfavorable net price realization, lower volumes in Protective and unfavorable impacts from currency translation, partially offset by decreased operating costs.

The adjusted EBITDA margin was 21.7% compared with the year-ago quarter’s 20.9%. The 80-basis point expansion was aided by lower operating costs, driven by productivity benefits including savings from the CTO2Grow Program.

Sealed Air’s Q1 Segment Performances

Food: Net sales were down 2% year over year to $852.1 million. The figure surpassed our estimate of $841.4 million. Pricing actions had a favorable impact of 0.6%, while volumes grew 0.3%. Foreign currency had an unfavorable impact of 2.8%. We expected volume to be flat and pricing growth of 0.2%.

Adjusted EBITDA was around $203 million, up 7% from the last-year quarter, aided by lower operating costs, including benefits from the company’s productivity and CTO2Grow Program initiatives, partially offset by unfavorable net price realization. The reported figure surpassed our estimate of $194 million.

Protective: The segment recorded net sales of $420 million in the quarter under review, down 9% from the year-ago quarter. We expected net sales of $419 million.

Currency had an unfavorable impact of 1.2%. Pricing had a negative effect of 1.4%, whereas volumes fell 6.2% due to continued market pressures in the industrial and fulfillment sectors.

Our model predicted a negative currency impact of 2.4% and price to impact net sales by 2.6%. We expected volume to fall 4.2% in the quarter.

The segment’s adjusted EBITDA decreased 17% year over year to $74 million, due to lower volumes and unfavorable net price realization. This was partially offset by lower operating costs due to productivity benefits, including the CTO2Grow Program. We expected adjusted EBITDA to be $73.8 million.

SEE’s Cash Flow & Balance Sheet Updates

Cash flow generated from operating activities was around $32 million in the first quarter of 2025, lower than $125 million in the prior-year quarter. The company paid out cash dividends of $30 million in the first quarter.

As of March 31, 2025, Sealed Air’s total debt was $4.4 billion, flat compared with as of Dec. 31, 2024. As of the end of the first quarter of 2025, the company had $1.3 billion of liquidity available, which comprised $335 million in cash and $1 billion 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 23% compared with the industry’s 11.9% 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 Q1?

Amcor Plc AMCR reported third-quarter fiscal 2025 (ended March 31, 2025) adjusted earnings per share of 18 cents, in line with the Zacks Consensus Estimate as well as the year-ago quarter’s figure. 

Amcor’s revenues dipped 2.3% year over year to $3.33 billion. The top line missed the Zacks Consensus Estimate of $3.49 billion.

Sonoco SON came out with quarterly earnings of $1.38 per share, missing the Zacks Consensus Estimate of $1.39 per share. The bottom line was 23% higher than the earnings of $1.12 per share reported in the year-ago quarter.

Sonoco posted revenues of $1.71 billion for the quarter, missing the consensus estimate of $2.11 billion. This compares with year-ago revenues of $1.64 billion.

Packaging Corporation of America PKG reported adjusted earnings per share of $2.31 in the first quarter of 2025, beating the Zacks Consensus Estimate of $2.21. The bottom line increased 34% year over year. The figure was above the company’s guidance of $2.21.

Packaging Corp.’s sales in the first quarter rose 8.2% year over year to $2.141 billion. PKG’s top line surpassed the Zacks Consensus Estimate of $2.140 billion.

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