Amcor Shares Bounce as Investors Look Past Earnings Miss and Guidance Cut to Volume Growth and Synergies

Shares of Amcor PLC rose 4.7% on the Australian Securities Exchange on Friday, recovering after the packaging giant's first-quarter results disappointed investors in New York.

Amcor's ASX-listed shares gained A$2.90 to A$65.01, after trading between A$64.97 and A$65.95. About 1.4 million shares changed hands, valuing the company's ASX line at roughly A$8.5 billion.

The rebound followed a sharp drop in the U.S. Amcor's NYSE-listed shares fell 6.89% after the results.

Revenue beats, earnings miss

The quarterly figures were mixed. Net sales rose 7% to $6.129 billion, about 3.3% above the analyst estimate of $5.934 billion, while adjusted earnings per share of 95 cents fell short of the $1.0265 consensus.

GAAP net income was $242 million, and adjusted EBITDA of $883 million was flat from a year earlier.

Not all analysts saw a large miss. UBS said earnings per share came in at the midpoint of guidance and 1% below consensus, as lower interest and tax expenses partly offset softer operating performance. The broker reiterated its Buy rating and $56 price target.

Guidance trimmed

Rising costs forced a forecast cut. Amcor lowered its adjusted EPS outlook for the transition period to $1.70 to $1.80 a share from $1.80 to $1.90, citing the timing of pass-through of higher energy and distribution costs.

Management described a tough backdrop. The company said it managed challenges from "a volatile inflationary environment," which has extended beyond resins to energy and distribution costs.

Positives for investors

Volumes are improving. Organic volume rose 1%, the fourth consecutive quarter of sequential improvement, with focus categories up 3%.

The integration of Berry Global is delivering savings. Amcor captured $60 million of synergies during the quarter and maintains its three-year $650 million target.

The company raised its quarterly dividend to 66 cents a share.

The longer-term outlook remains upbeat. Management expects double-digit adjusted EPS growth in calendar 2027 and targets leverage of about 3 times by the end of 2027.

Debt and cash flow

Leverage remains a focus. Net debt stood at $14.0 billion, with leverage at 3.76 times. Free cash outflow was $820 million, including a $500 million working capital increase tied to the Middle East conflict, which Amcor expects to recover by the end of 2027.