Amcor Q1 Earnings Call Highlights

Key Points

• Amcor cut its transition-period adjusted EPS outlook to $1.70–$1.80 from $1.80–$1.90 as rising energy and distribution costs outpaced pricing recovery. Management expects pricing and cost actions to catch up by the end of the December quarter and reiterated its expectation for double-digit adjusted EPS growth in 2027.
• Quarterly revenue rose 7% to $6.1 billion, with 1% organic volume growth across all geographies; volumes in focus categories increased 3%. Adjusted EPS was $0.95, flat year over year on a constant-currency basis after divestiture adjustments.
• The board approved a quarterly dividend increase to $0.66 per share. Amcor reported an $820 million free-cash-flow outflow for the quarter but expects about $800 million of positive free cash flow in the December quarter.

Amcor NYSE: AMCR lowered its adjusted earnings outlook for its six-month transition period as rising energy and distribution costs outpaced its ability to pass those expenses on to customers, even as the packaging company reported organic volume growth for the quarter ended September 30, 2026.

The company now expects adjusted earnings per share of $1.70 to $1.80 for the transition period, down from its previous forecast of $1.80 to $1.90. Chief Executive Officer Peter Konieczny said Amcor is implementing pricing and cost actions and does not expect the current inflationary pressures to hurt results in 2027.

Revenue rose 7% to $6.1 billion in the quarter, supported by 1% organic volume growth and the pass-through of higher raw material costs. Adjusted earnings per share were $0.95, flat with the prior year on a constant-currency basis after adjusting for divestitures, the company said.

Amcor’s board also approved an increase in the quarterly dividend to $0.66 per share. Konieczny described the increase as modest and said it reflected confidence in the company’s business momentum and capital allocation approach.

Inflation Pressures Outlook

Konieczny said Amcor passed through $435 million in higher resin costs during the quarter. But energy and distribution costs accelerated late in the period, creating a timing gap before the company could recover those expenses through pricing.

Chief Financial Officer Steve Scherger estimated the gross energy- and distribution-related inflation Amcor is seeing in the December quarter at more than $100 million, with the company offsetting nearly half. Management said it is relying on contractual pass-through provisions, additional price increases and productivity measures to address the costs.

“Between our cost actions and the pricing that we need to bring to market, we think that we catch up by the end of the December quarter,” Konieczny said. That would leave no impact in 2027 from the inflation the company is currently addressing, he added.

Scherger said Amcor is examining freight procurement, supplier arrangements and truck utilization as part of its cost response.

Volume Growth and Segment Results

Organic volume growth was positive across all geographies, Konieczny said. Volumes in Amcor’s focus categories rose 3%, with growth in pet food and food service. The company also reported positive volumes in beauty and wellness, liquids, and healthcare, while protein was flat.

Konieczny said October volumes were broadly in line with the September quarter. He also said Amcor’s China business, which generates more than $1 billion in annual sales, was posting high-single-digit growth and gaining market share.

In global flexible packaging solutions, sales rose 10% on a constant-currency basis, driven by higher raw material cost pass-throughs. Segment volumes were flat, although they rose approximately 1% excluding sales of unconverted films in North America. Adjusted operating profit increased 1% to $414 million.

Global rigid packaging solutions volumes grew 2%, while sales increased 2% on a constant-currency basis. Adjusted operating profit declined 3% to $303 million; excluding divestitures, it increased approximately 3%, Scherger said.

Synergies, Cash Flow and Debt

Amcor recorded $60 million in quarterly synergies and maintained its targets of $130 million for the transition period and $650 million over three years. Konieczny said the company expects to achieve the majority of the three-year target by the end of 2027. New business awards tied to growth synergies totaled $170 million in annual sales, he said.

The company reported a free cash outflow of $820 million for the quarter, including $31 million in Berry transaction, restructuring and integration costs. Capital expenditures were $301 million.

Scherger said Amcor expects approximately $800 million of positive free cash flow in the December quarter, leaving free cash flow roughly neutral for the transition period. He said about $500 million remains tied up in additional inventory and receivables associated with the Middle East conflict, with recovery expected primarily during 2027.

Leverage ended the September quarter at 3.76 times, and Amcor expects it to be approximately 3.6 times at the end of the transition period. Management reiterated a target of approximately 3 times by the end of 2027, supported by earnings growth, cash generation and working-capital recovery. The company also expects double-digit adjusted earnings-per-share growth in 2027.

Portfolio Review Continues

Konieczny said discussions about selling the North American beverage business remain active but are taking longer than anticipated. He attributed the extended timetable in part to market and geopolitical volatility.

The business remains non-core, he said, and Amcor’s objective is to find another owner. Scherger said non-core volumes fell by a low- to mid-single-digit percentage in the quarter, while overall performance was in line with the company’s expectations.

About Amcor (NYSE:AMCR)

Amcor plc NYSE: AMCR is a global packaging company that develops and produces packaging solutions for food, beverage, pharmaceutical, medical, personal care, household, and other consumer and industrial products. Its offerings include flexible packaging, rigid containers, closures, bottles, specialty cartons, and related packaging systems designed to protect products, support supply chains, and improve convenience and sustainability.

The company serves customers across North America, Latin America, Europe, Asia-Pacific, and other international markets.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.