Greif Earnings Beat Estimates in Q2, Revenues Increase 1% Y/Y

Greif, Inc. GEF reported adjusted earnings per share of $1.19 for second-quarter fiscal 2025, beating the Zacks Consensus Estimate of $1.08. The bottom line improved 43.4% year over year.

Including one-time items, EPS was $1.22 in the quarter compared with $1.15 in the prior-year quarter.

Greif’s Revenues & Margins Rise Y/Y in Q2

Revenues moved up 1.1% year over year to $1.39 billion. However, the top line missed the Zacks Consensus Estimate of $1.43 billion. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

The cost of sales rose 3.7% year over year to $1.07 billion. Gross profit amounted to $319.5 million, increasing 18.3% from the prior-year quarter. The gross margin came in at 23.1%, up from last year’s 19.7%.

Selling, general and administrative expenses were $173 million compared with the prior-year quarter’s $167 million. Adjusted EBITDA rose 26% year over year to $214 million in the fiscal second quarter. The adjusted EBITDA margin was 15.4% compared with 12.4% in the year-ago quarter.

GEF’s Q2 Segmental Performance

The company completed its previously announced business model optimization. Starting the first quarter of fiscal 2025, it is reporting results under four new segments.

Revenues in the Customized Polymer Solutions segment were $329 million, higher than the prior-year quarter’s $286 million on contributions from recent acquisitions. Our model projected revenues of $351 million for the quarter. The segment’s adjusted EBITDA amounted to $53 million compared with the year-ago quarter’s $34.9 million. The reported figure beat our estimate of $39 million.

The Durable Metal Solutions segment’s revenues fell 8.4% year over year to $379 million in the fiscal second quarter due to lower average selling prices. The figure missed our estimated revenues of $386 million. The segment’s adjusted EBITDAwas $63.7 million, lower than the prior-year quarter’s $64.5 million. We projected the segment’s adjusted EBITDA to be $64 million.

The Sustainable Fiber Solutions segment’s revenues grew 3.3% year over year to $599 million in the fiscal second quarter due to higher published containerboard and boxboard prices. The figure beat our estimated revenues of $561 million. The segment’s adjusted EBITDA rose to $79.5 million from the prior-year quarter’s $49.5 million. We projected the segment’s adjusted EBITDA to be $58.5 million.

The Integrated Solutions segment’s revenues totaled $78 million in the reported quarter compared with $92 million in the year-ago quarter. We projected the segment's revenues to be $67 million in the quarter. Adjusted EBITDA was $17.3 million compared with the year-earlier quarter’s $20.8 million. Our projection for the quarter’s adjusted EBITDA was $21 million.

Greif’s Cash & Debt Position in Q2

GEF reported cash and cash equivalents of $253 million at the end of second-quarter fiscal 2025 compared with $198 million at the end of fiscal 2024. Cash generated from operating activities totaled $136 million in the quarter under review compared with $87.5 million in the prior-year quarter.

Long-term debt was $2.29 billion as of April 30, 2025, compared with $2.63 billion as of Oct. 31, 2024.

On June 2, Greif’s board announced a quarterly cash dividend of 54 cents per share of Class A Common Stock and 81 cents per share of Class B Common Stock. The dividend will be paid out on July 1, 2025, to its shareholders of record at the close of business as of June 17, 2025.

GEF’s FY25 Outlook

Greif expects the low end of the fiscal 2025 adjusted free cash flow to be $280 million. The low end of adjusted EBITDA is anticipated to be $725 million, up from the previously announced $710 million.

Greif’s Stock Price Performance

The company’s shares have lost 9.5% in a year compared with the industry’s 8.4% decline.

GEF’s Zacks Rank

Greif currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Greif’s Peer Performances

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 and the year-ago quarter’s reported 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. The bottom line was 23% higher than earnings of $1.12 in the year-ago quarter.

SON 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 revenues 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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