Amcor shares rise after solid Q3 result
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More news: Shares in Amcor were up nearly 4% to $14.35 in early trading on the ASX after the packaging giant narrowed its earnings guidance following an improved performance in the third quarter. Analysts said the overall volume performance was better than expected.
What they said: "Management's expectation of abating destocking and a top-line inflection point are encouraging and cost-out initiatives appear to be working. That said, the growth outlook remains modest," Morgan Stanley analysts said in a note, retaining their 'Equal Weight' rating on the stock.
Amcor narrows earnings guidance amid slow demand recovery
The news: Global packaging giant Amcor has narrowed its earnings guidance after an improved performance in the third quarter despite softening demand in North America and Europe.
The numbers: Net income for the nine months to 31 March was down 12% from a year ago to USD710 million ($1.1 billion), while net sales were down 8% to USD10.1 billion. Adjusted earnings per share was down 9% from a year ago to 49.1 US cents. Amcor will pay a quarterly dividend of 12.5 US cents, up from 12.25 US cents a year ago.
The context: Amcor said overall volumes were lower in the March quarter, reflecting lower customer demand as well as significant destocking in both North America and Europe. However, volume performance substantially improved on the previous quarter and the company’s bottomline benefited from structural cost initiatives and maintaining a flexible cost base.
“We expect our momentum will continue to build, including delivering mid single digit adjusted EPS growth in our final quarter of fiscal 2024,”Interim CEO Peter Konieczny said.
Amcor has narrowed its guidance range for adjusted EPS to 68.5-71 US cents from 67-71 US cents a share earlier. It reaffirmed full-year adjusted free cash flow guidance of between USD850 million and USD950 million.
The source: ASX
