Amcor's Net Loss Despite Rising Sales Alters Investment Narrative and Future Outlook

Amcor's Q4 sales rose to $5.08 bln, up from $3.54 bln YoY, but the company moved to a net loss of $39 mln from a net income of $257 mln in the prior year. Despite higher revenues, the shift from profits to a loss marks a significant change in Amcor's recent financial trend and may alter stakeholder expectations. Investors should be mindful of ongoing portfolio reviews and potential asset sales affecting future profitability.

Amcor plc (NYSE: AMCR), a global leader in consumer packaging and dispensing solutions, reported its Q4 and fiscal 2025 results on August 14, 2025. The company's revenue (GAAP) rose to $5.08 billion, up 43% year-over-year on a constant currency basis, from $3.535 billion in the prior year [1]. However, the company moved to a net loss of $39 million, compared to a net income of $257 million in the prior year, marking a significant change in Amcor's recent financial trend [1].

The quarterly dividend increased by 2% to $0.1275 per share, and adjusted earnings per share (EPS) (non-GAAP) reached $0.71, far exceeding the non-GAAP forecast of $0.21 [1]. This surge in adjusted earnings was primarily driven by acquisition-related effects, while organic revenue growth remained flat and North America beverage sales declined in the second half of fiscal 2025 [1].

The most notable development during the period was the completed acquisition of Berry Global, which significantly increased Amcor’s global presence and lifted total annualized sales to $23 billion [1]. This transaction contributed approximately $1.5 billion in acquired net sales and approximately $200 million in acquired adjusted EBIT, representing almost all of the year-over-year revenue growth. However, excluding these acquired results, the combined company’s volumes slipped by 1.7% compared to the prior-year quarter, highlighting weakness in organic growth, especially in North America [1].

Amcor's Global Flexible Packaging Solutions segment saw net sales rise to $3.205 billion, up 18% versus the previous year when measured on a constant currency basis. However, adjusted EBIT for the segment increased, but volumes fell by about 1.5% year-over-year. The Global Rigid Packaging Solutions business delivered $1.88 billion in adjusted net sales (non-GAAP), more than doubling from the previous year as the Berry acquisition expanded this segment [1].

Investors should be mindful of ongoing portfolio reviews and potential asset sales affecting future profitability. Around $2.5 billion of annual sales have been identified as non-core in the new business portfolio and earmarked for potential divestment or restructuring [1]. No cash flow from these potential divestments has yet been realized, and management stated there is no fixed timeline for completing these actions.

Looking ahead, management guided to adjusted EPS in the range of $0.80 to $0.83 for fiscal 2026, reflecting expected growth of 12 to 17% at constant currency. This outlook is underpinned primarily by synergy realization, with management highlighting a planned $260 million synergy contribution. Free cash flow is projected between $1.8 billion and $1.9 billion [1].

Investors should pay close attention to several critical areas in the quarters ahead, including the pace and quality of synergy delivery, developments in North American beverage volumes, and progress on portfolio optimization and any divestment outcomes. Changes in underlying organic growth, especially outside of one-time integration benefits, will also be important to monitor. Sustainability advancements and financial leverage reduction are longer-term priorities that could move the needle on the company’s risk profile and market valuation [1].

References:
[1] https://www.aol.com/finance/amcor-posts-44-percent-sales-105739687.html
[2] https://finance.yahoo.com/news/citi-remains-bullish-amcor-plc-144606083.html