Graphic Packaging Holding Company reports decline in net income for Q1 2025

In Atlanta, Georgia on May 1, 2025, Graphic Packaging Holding Company revealed its financial results for the first quarter of 2025. The company's net income was reported at $127 million, translating to $0.42 per diluted share, a decrease from $165 million or $0.53 per diluted share in the same quarter of 2024. This decline was attributed to special items and amortization of purchased intangibles, differing by $27 million and $38 million respectively between the two periods. Adjusted net income, which excludes the impact of these special items, was $154 million or $0.51 per diluted share for Q1 2025 compared to $203 million or $0.66 for Q1 2024. The financial performance was further characterized by a 6% decrease in net sales to $2,120 million, down from $2,259 million a year earlier. Adjusted EBITDA also saw a significant drop to $365 million from $443 million in the previous year's quarter, showcasing a decline in margin from 19.6% to 17.2% year-over-year. Additionally, total debt increased by $526 million during the first quarter, reaching $5,735 million compared to the previous quarter. This marked a rise in the company's net debt to $5,606 million and elevated the net leverage ratio to 3.5x, indicating potential concerns regarding leverage amid declining revenues and earnings. The reduction in packaging volumes in the Americas, alongside a marginal increase in international volumes, reflects shifting pressures within the market. The company also announced the closure of its Middletown, Ohio recycled paperboard facility while noting that the investment in Waco, Texas, for recycled paperboard is set for a Q4 2025 start-up. Furthermore, a robust commitment was made towards shareholder returns with a new share repurchase authorization of $1.5 billion, which is expected to bolster shareholder confidence despite the downward trends in earnings and sales indicators. The report highlights the substantial challenges Graphic Packaging is facing in a volatile economic environment, with inflation impacting costs, the need for lower-cost products, and the complexities of conducting business internationally. However, the company remains focused on implementing strategies for productivity enhancements and cost reductions, which it views as vital for navigating the short-term obstacles while striving for long-term growth and stability within the packaging sector. Ultimately, the expectations conveyed in this report underscore an urgent need for a strategic recalibration to adapt to these dynamic market conditions.