Greif A 2025 Q2 Earnings Mixed Performance as Net Income Climbs 4.8%

Greif A (GEF) reported its fiscal 2025 Q2 earnings on Jun 05th, 2025. Greif's earnings results were mixed, with net income rising to $54.50 million, surpassing expectations, while revenue missed the anticipated target of $1.42 billion. However, the company raised its guidance, boosting the low-end fiscal 2025 adjusted EBITDA to at least $725 million and adjusted free cash flow guidance to $280 million, reflecting improved EBITDA and operational efficiencies.

Revenue
Greif A's total revenue for 2025 Q2 reached $1.39 billion, marking a 1.1% increase from the prior year. The Customized Polymer Solutions segment contributed $329.30 million, while the Durable Metal Solutions segment generated revenue of $378.90 million. Sustainable Fiber Solutions remained the largest contributor with $599.10 million, and Integrated Solutions added $78.40 million to the total net sales figure.

Earnings/Net Income
Greif A's EPS climbed by 6.5%, reaching $0.82 in 2025 Q2 compared to $0.77 in 2024 Q2, demonstrating sustained earnings growth. The company's net income rose by 4.8% to $54.50 million from $52 million the previous year. The EPS growth indicates positive financial performance.

Price Action
The stock price of Greif A has climbed 5.44% during the latest trading day, has jumped 13.75% during the most recent full trading week, and has surged 18.58% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Greif A shares following a quarterly revenue increase on the earnings release date and holding for 30 days yielded disappointing results, with a return of -2.67%, significantly underperforming the benchmark's 38.41% return. The excess return was -41.08%, and the compound annual growth rate (CAGR) was -0.91%, indicating considerable losses over the three-year period. Additionally, the strategy experienced a high maximum drawdown of -36.33% and a Sharpe ratio of -0.03, suggesting elevated risk and negative returns. These results highlight the challenges faced by investors employing this post-earnings strategy, emphasizing the need for careful consideration of market dynamics and timing.

CEO Commentary
Ole G. Rosgaard, President, CEO & Director, emphasized the strong performance driven by Greif's resilient business model and commitment to cost optimization amidst macroeconomic volatility. He noted, "Our culture remains a core competitive advantage," highlighting recognition from Newsweek and Gallup as evidence of high colleague engagement. Rosgaard stated, "Our strategy is working," as the company optimizes operations and expands in high-return markets. He expressed confidence in achieving both 2025 and 2027 commitments, affirming, "I have never been more confident in our team or more optimistic about Greif's future" while acknowledging ongoing challenges in certain industrial markets.

Guidance
Greif has raised its low-end fiscal 2025 guidance for adjusted EBITDA to at least $725 million, up from $710 million. The adjusted free cash flow guidance has also increased to $280 million from $245 million, reflecting improved EBITDA and operating working capital management. The company noted that this raise is grounded in demonstrated execution and is not based on optimism, with a focus on managing volume assumptions and potential impacts from market dynamics.

Additional News
Greif Inc. has announced the permanent closure of its Los Angeles paperboard mill, ceasing operations in June 2025. This facility's shutdown will remove 50,000 tons of coated recycled paperboard and 22,000 tons of uncoated recycled paperboard capacity from the market. In addition, Greif has declared a quarterly cash dividend of $0.54 per share for Class A Common Stock and $0.81 per share for Class B Common Stock, payable on July 1, 2025. Furthermore, Greif has been honored as a Stevie® Award Winner in the 2025 American Business Awards®, securing two awards for CEO Ole Rosgaard and the company itself in the manufacturing category.