Berry Global beats Q2 earnings estimates, revenue falls short

EVANSVILLE, Ind. – Berry Global Group, Inc. (NYSE: NYSE:) reported second-quarter earnings that slightly surpassed Wall Street’s expectations, with adjusted earnings per share (EPS) of $1.95, $0.03 higher than the analyst estimate of $1.92.

However, the company’s revenue for the quarter was $3.1 billion, falling short of the consensus estimate of $3.17 billion.

The company’s second-quarter performance demonstrated resilience despite a challenging macroeconomic environment. Berry’s CEO, Kevin Kwilinski, attributed the solid financial results to the company’s effective execution in the face of sluggish demand and persistent inflation affecting primary raw materials. Kwilinski highlighted the company’s increased cost savings target, which rose by 18% or an additional $25 million, and the completion of two strategic divestitures that could yield over $2 billion in cash over the next year.

Berry’s net sales showed a 6% decrease compared to the same quarter last year, while operating income dropped to $208 million from $301 million in the prior year. The decline in operating income was mainly due to goodwill write-offs in the Consumer Packaging (NYSE:) International segment and an unfavorable impact from volume and price-cost spread related to the timing of passing through resin costs.

Looking ahead, Berry Global reaffirmed its fiscal 2024 outlook, expecting adjusted EPS in the range of $7.35 to $7.85 and free cash flow between $800 million and $900 million. The company’s guidance for the third quarter of 2024 anticipates adjusted EPS to be between $7.35 and $7.85, with the midpoint of $7.60 slightly above the analyst consensus of $7.51.

Berry Global’s commitment to shareholder value is evident in its plans to continue focusing on driving shareholder value and prioritizing debt repayment in 2024. The company also remains dedicated to returning capital to shareholders through share repurchases and dividend payments.

Berry Global’s financial health appears robust, with the company expecting to be within its leverage target of 2.5x to 3.5x by the end of fiscal 2024. The company’s disciplined approach to capital allocation, combined with its strategic divestitures, positions it well for future growth and operational excellence.

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