Amcor NYSE: AMCR reported fiscal 2026 third-quarter results that management said were in line with expectations, while highlighting accelerating synergy capture from the Berry combination, continued progress on divesting non-core assets, and updated free cash flow guidance reflecting a decision to hold more inventory amid supply-chain uncertainty tied to the Middle East conflict.
Q3 results and key drivers
Chief Executive Officer Peter Konieczny said adjusted earnings per share were $0.96, up 6% year-over-year. For the first nine months of fiscal 2026, adjusted EPS increased 11% to $2.79. Revenue in the quarter was $5.9 billion, with EBITDA of $892 million and EBIT of $687 million, which Konieczny attributed largely to the Berry acquisition, cost discipline, productivity, and synergies.
He said Q3 adjusted EPS also reflected “tax-related synergies that lowered our effective tax rate,” partially offset by a $25 million unfavorable impact from winter storms in the U.S. during January and February. After $78 million of cash costs tied to the Berry transaction, restructuring, and integration, Amcor reported a free cash outflow of $39 million in the quarter.
The board declared a quarterly dividend of $0.65 per share, which Konieczny said was “modestly up over the prior year” and aligned with Amcor’s capital allocation framework and commitment to annualized dividend growth.
Integration update: One year after Berry combination
Konieczny marked the first anniversary of the combination between legacy Amcor and Berry, calling the integration “very smooth.” He said the company moved quickly to structure the organization and deliver on initial synergy commitments, while also identifying non-core businesses targeted for divestiture.
Chief Financial Officer Steve Scherger said synergy delivery accelerated in Q3, with approximately $77 million captured in the quarter and about $170 million over the first nine months. Management said it expects $270 million of synergies in fiscal 2026, ahead of the original year-one target of $260 million, and reiterated a goal of $650 million cumulatively over three years.
Scherger said G&A and procurement synergies are ramping as planned, with a target of about $160 million in year one and about $325 million by fiscal 2028. He added that operational synergies have begun contributing modestly, with most expected in years two and three. Financial synergies were approximately $20 million in the quarter and $30 million year-to-date, driven by debt and tax structure optimization. He also said “growth synergies” are tracking toward a three-year annualized revenue target of $280 million, with annualized revenue wins now exceeding $110 million.
Portfolio optimization and divestitures
Konieczny said Amcor reached four additional sale agreements over the past three months, adding to two previously announced in Q1. He said the six divestitures together represent roughly $500 million of combined annual revenue and approximately $500 million in transaction value, implying an average multiple of around 6x. He said all cash proceeds will be used to reduce debt and the net impact on EPS is not expected to be material.
Management also said it is exploring alternatives for remaining non-core businesses, including “further encouraging discussions related to the North American beverage business.” In response to an analyst question, Konieczny said the composition of non-core assets has not changed since the post-combination strategic review, emphasizing the company does not intend to be “erratic or opportunistic” in response to market dislocations. He said performance across non-core businesses improved in Q3, aided by productivity actions and customer interactions addressing margin challenges, and said the company expects further profitability improvement sequentially in Q4.
Segment and volume commentary
Scherger said overall volumes declined about 1.5% in the quarter, while the $20 billion core portfolio delivered about 12.3% EBIT margins, supported by mix, advanced solutions, and year-one synergies. He said focus categories (healthcare, beauty and wellness, proteins, liquids, food service, and pet care) represent about half of core portfolio sales and continue to outperform the portfolio average.
In Global Flexible Packaging Solutions, sales rose 29% on a constant-currency basis, driven primarily by the Berry acquisition. On a comparable basis, volumes were down about 1.5%, improving 100 basis points sequentially versus Q2. Adjusted EBIT increased 28% on a constant-currency basis to $452 million, supported by acquired earnings and synergies; excluding synergies, comparable earnings were “broadly in line with the prior year,” Scherger said.
In Global Rigid Packaging Solutions, sales increased significantly on a constant-currency basis, again mainly due to the acquisition. Comparable volumes were down about 1.5% in both core and non-core businesses, which Scherger said was “modestly weaker sequentially” due largely to the winter storm impact. Adjusted EBIT was $276 million, with synergy benefits offset by a $25 million storm impact. Excluding the winter storm impact, adjusted EBIT margin was about 13%, 100 basis points higher than Q2, according to Scherger.
Konieczny added that emerging markets returned to growth, with mid-single-digit growth in both Latin America and Asia-Pacific, while North America was “a little weaker” than Q2 due to winter storms, particularly in the rigid business. He also said the focus categories outperformed overall performance by about 150 basis points and were collectively flat.
Middle East conflict, pricing actions, and updated cash flow outlook
Management emphasized it does not expect the Middle East conflict to have a material impact on Q4 earnings. Konieczny said Amcor has “no operations in the Middle East,” sources less than 5% of its resin from the region, and is prioritizing supply continuity and inflation mitigation. Scherger said the company has minimal polymer sourcing from the region and can flex sourcing, production, and product formulations across a broad supplier base and global network.
In the Q&A, Konieczny described the company’s approach to recovering inflation through a mix of contracted and non-contracted business, noting the combined company is roughly 70% contracted and 30% non-contracted. For non-contracted business, he said Amcor can implement general price increases more quickly. For contracted business, he said pass-through clauses have improved since prior inflationary periods, and in some cases contracts include “opening clauses” for situations outside normal ranges. He characterized discussions with customers as ongoing and collaborative rather than one-time events, focused on aligning costs and maintaining supply.
Amcor reaffirmed adjusted EPS guidance of $3.98 to $4.03 for fiscal 2026. However, management reduced its free cash flow outlook to $1.5 billion to $1.6 billion, down from the prior $1.8 billion to $1.9 billion range. Konieczny and Scherger said the change reflects a decision to hold more inventory—primarily to ensure supply continuity—combined with higher input costs, shifting the timing of previously expected working capital improvements. Scherger said the company is “not building necessarily volume of inventory,” but rather maintaining levels instead of reducing them as previously assumed, with the cash impact driven by inflation on inventory values.
Adjusted leverage ended the quarter at 3.8x. With the updated outlook, Scherger said Amcor now expects year-end leverage of about 3.4x to 3.5x, while reiterating a commitment to an investment-grade profile and a longer-term pathway to a 2.5x to 3x leverage range. He pointed to divestiture proceeds, synergy capture, and cash flow generation as supporting deleveraging over the next 12 to 18 months.
Separately, Scherger announced that effective in 2027 the company will change its fiscal year-end from June 30 to Dec. 31, with a six-month reporting period from July 1, 2026 through Dec. 31, 2026. He said Amcor plans to provide guidance for the transition period alongside its fiscal Q4 and full-year results in August. He also said the company will begin migrating and consolidating select corporate functions to a new U.S. headquarters in Miami, Florida, while Switzerland and Australia will remain key corporate hubs.
About Amcor NYSE: AMCR
Amcor NYSE: AMCR is a global packaging company specializing in the design, development and production of flexible and rigid packaging solutions for food, beverage, pharmaceutical, medical, home and personal care, and other consumer and industrial products. The company's product portfolio encompasses flexible films, pouches, specialty cartons, rigid containers, metal closures and dispensing systems. Amcor's packaging solutions are engineered to preserve product quality, extend shelf life and meet the specific requirements of a wide range of end markets.
Founded in its current form in 2005 following a spin-off from a mining conglomerate, Amcor expanded its capabilities and geographic footprint through organic investments and strategic acquisitions.
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