Graphic Packaging Reports 6% Decline in Net Sales, Stable Net Income in Q3 2024

Graphic Packaging Holding Company reported its financial results for the third quarter and the nine months ended September 30, 2024, showing a decline in net sales and income compared to the previous fiscal period. For the three months ended September 30, 2024, net sales were $2,216 million, a decrease of 6% from $2,349 million in the same period of 2023. For the nine months, net sales totaled $6,712 million, down from $7,179 million, reflecting a 7% decline. The decrease in revenue was attributed to the divestiture of the Augusta facility, reduced open market paperboard volumes, and pricing declines, partially offset by higher packaging volumes and contributions from the acquisition of Bell Incorporated.

Net income for the third quarter of 2024 remained stable at $165 million, compared to $170 million in the prior year. For the nine months, net income was $520 million, consistent with the previous year. Earnings per share (EPS) for the third quarter were $0.55, unchanged from the same period in 2023, while the nine-month EPS was $1.71, also stable year-over-year.

The company’s income from operations for the third quarter of 2024 was $278 million, a slight decrease from $287 million in 2023. Factors contributing to this decline included the Augusta divestiture, pricing and volume declines in bleached paperboard, and weather-related issues. However, cost savings and productivity improvements helped mitigate some of these impacts.

In terms of strategic developments, Graphic Packaging completed the acquisition of Bell Incorporated for $262 million on September 8, 2023, which added three packaging facilities. The company also divested its Augusta facility for $711 million on May 1, 2024, realizing a gain of $75 million from the sale. Additionally, the company announced plans to close multiple packaging facilities by the end of 2024, consolidating production into existing facilities to enhance operational efficiency.

Cash flow from operating activities for the nine months ended September 30, 2024, was $351 million, a decrease from $702 million in the same period of 2023, primarily due to tax payments related to the Augusta sale and increased working capital usage. The company’s capital expenditures increased significantly to $893 million in 2024, driven by the construction of a new recycled paperboard manufacturing facility in Waco, Texas.

As of September 30, 2024, Graphic Packaging maintained a strong liquidity position, with compliance to its credit agreements and a credit rating of BB+ from Standard & Poor's. The company continues to focus on innovation and sustainable packaging solutions, which contributed positively to its sales growth despite the overall revenue decline.