Sealed Air 2025 Q1 Earnings Net Income Climbs 38.4% Despite Revenue Dip

Sealed Air (SEE) reported its fiscal 2025 Q1 earnings on May 6, 2025. The company faced a 4.3% decline in total revenue, falling to $1.27 billion from last year's $1.33 billion. However, net income increased by 38.4%, reaching $113.5 million, driven by significant EPS growth. Sealed Air maintained its full-year guidance, reflecting a cautious yet optimistic outlook in a challenging market environment.

Revenue
Sealed Air's revenue for the first quarter of 2025 declined by 4.3% to $1.27 billion, compared to $1.33 billion in the first quarter of 2024. The Food segment contributed $852.1 million, reflecting a 2% decrease, while the Protective segment saw a 9% drop, generating $420.4 million. The overall decline was influenced by adverse currency effects and a challenging business environment.

Earnings/Net Income
Sealed Air's earnings per share (EPS) experienced a remarkable increase of 36.8%, reaching $0.78 in Q1 2025, up from $0.57 in Q1 2024. The company's net income rose to $113.5 million, marking a 38.4% growth from $82 million in the previous year. This impressive EPS performance highlights the company's continued earnings growth.

Price Action
The stock price of Sealed Air edged down 0.38% during the latest trading day, climbed 3.69% during the most recent full trading week, and increased 6.87% month-to-date.

Post-Earnings Price Action Review
The investment strategy of purchasing Sealed Air shares following a quarter-over-quarter revenue increase and holding them for 30 days yielded a 13.07% return, which was considerably below the benchmark's 83.12% return. The strategy demonstrated a compound annual growth rate (CAGR) of 2.52%, with a maximum drawdown of -10.77%, and a Sharpe ratio of 0.29, indicating moderate risk and return characteristics. This underperformance highlights the challenges of relying solely on revenue growth as a predictor of future stock performance, emphasizing the importance of a diversified investment approach.

CEO Commentary
"Our first quarter results were ahead of our expectations driven by continued execution on business fundamentals," said Dustin Semach, Sealed Air's President and CEO. He highlighted organic growth in the Food business, which benefitted from gaining market share in retail through case-ready solutions, while volumes in the Protective business showed stabilization due to ongoing transformation efforts. Semach emphasized a focus on "controlling the controllables" and executing the company's transformation strategy while supporting customers amid market uncertainties, indicating a cautious yet optimistic outlook.

Guidance
The company is maintaining its full-year guidance for 2025. Interim CFO Roni Johnson noted the intention to stay prudent while navigating a limited-visibility environment, assessing evolving trade policies and the demand landscape for the second half of the year as they progress through the second quarter.

Additional News
Sealed Air recently announced plans to close two of its manufacturing plants by the end of 2025 as part of its ongoing cost optimization efforts. This decision is part of a broader strategy to consolidate manufacturing assets and improve productivity within its facilities. Additionally, Dustin Semach was appointed as CEO, following a brief tenure by Patrick Kivits, who was CEO for less than a year. The company has also maintained its commitment to returning value to shareholders, with dividend payments remaining steady at $30 million for the first three months of both 2025 and 2024.