ASX stock Amcor PLC (ASX: AMC) has dropped into the red on Friday after the company posted its financials for the first quarter of FY25.
Shares in the packaging solutions company currently fetch $15.95 apiece, 5% lower on the day as investors react to the news.
The downsides come despite management reaffirming a positive outlook for the year. Here are the details.
Image source: Getty Images
ASX stock slides on Q1 results
In its latest quarterly update, Amcor reported mixed financial results. Here are the highlights:
- Net sales fell 3% year-over-year to US$3.35 billion, impacted by lower raw material costs and foreign exchange rates
- Adjusted pre-tax earnings rose 3% to US$365 million
- Reported net income came in at US$191 million, translating to earnings per share (EPS) of 13.2 US cents, up from 10.5 US cents the prior year
- Amcor increased its quarterly dividend to 12.75 US cents per share
What else happened in Q1 FY25?
The ASX stock reported steady volume growth in its core Flexibles and Rigid Packaging segments, with sequential improvement in customer demand.
Total volumes shipped were up 2% over the year, also up about 100 basis points from the previous quarter.
But there were headwinds, which management put down to softer demand from the US beverage and healthcare industries, plus the effect of sales price and sales mix.
In its flexibles segment, revenues of US$2.6 billion were down 1% on a reported basis, mostly impacted by unfavourable exchange rates.
Despite this, volumes were 3% higher in this segment over the twelve months.
Meanwhile, the Rigid Packaging division saw 8% lower sales growth compared to Q1 FY24, with volumes and average pricing both down. This may have impacted the ASX stock today.
What did management say?
Amcor's CEO, Peter Konieczny, expressed optimism about the company's growth trajectory:
I am pleased with the overall performance trajectory of the business and I am excited about the significant opportunities we have ahead of us to enhance our profitable organic growth profile, continue to build earnings momentum and evolve into an even stronger company than we are today.
We have already taken a number of concrete actions to further leverage Amcor's market leading positions and capabilities and strengthen our ability to generate attractive, sustainable shareholder returns.
The positive tone suggests Amcor is well-positioned to capitalise on ongoing customer demand, particularly with improvements in key segments.
What's next?
Looking ahead, the ASX stock aims to strengthen its market presence by focusing on organic growth and potential acquisitions.
The company reaffirmed its fiscal 2025 outlook, with expected adjusted EPS between 72 and 76 US cents and adjusted free cash flow of US$900 million to $1 billion.
Exchange rates could also be a factor to consider, the company says.
Assuming current exchange rates prevail through fiscal 2025, movements in exchange rates are not
expected to have a material impact on reported EPS.
ASX stock snapshot
The Amcor share price has been on a solid run in 2024, with shares up nearly 12% in that time. Investors have sold the ASX stock today after the Q1 FY25 numbers, despite the reaffirmed guidance.
In the last 12 months, it has rallied more than 16%.
