Amcor lifts despite half-year profit slide
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More news: Shares in packaging giant Amcor have jumped nearly 5% to $15 in early trading on the ASX, with the market cheering a smaller-than-expected slide in half-year profit.
UBS analyst Nathan Reilly said the first-half earnings per share of $31.3 cents was slightly ahead of market expectations due to lower tax, with "volume headwinds offset by solid cost control". He noted the company also expects the business to build momentum in the second half.
Amcor half-year profit slides as demand slows
The news: Global packaging giant Amcor has posted a sharp drop in half-year profit and sales amid softening demand in North America and Europe.
The numbers: Net income for the six months to 31 December slumped 58% from a year ago to USD286 million ($438 million), while net sales were down 9% to USD6.69 billion. Adjusted earnings per share was down 13% from a year ago to 31.3 US cents. Amcor will pay a quarterly dividend of 12.5 US cents.
The context: Amcor said there was broad-based volume weakness throughout the half year reflecting lower market and customer demand in both North America and Europe, while volumes were modestly higher in Asia. CEO Ron Delia said volumes in the December quarter were lower than anticipated “as destocking accelerated, particularly in the month of December, and demand remained soft”.
However, there has been a slight pick up in sales in January and the company has reaffirmed its full-year guidance for adjusted EPS to to be in the range of 67-71 US cents a share and adjusted free cash flow between USD850 million and USD950 million.
The source: ASX announcement
