Despite a 16 percent drop in earnings, Sonoco achieved record first-quarter net sales and adjusted EBITDA. This has led its CEO to maintain confidence in Sonoco’s ability to “deliver continued growth.”
Earnings
Sonoco Products Co. reported its first quarter 2025 financial results earlier this week despite declining earnings amid the geopolitical climate. The Hartsville, South Carolina-based packaging company posted record net sales and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), leaving CEO Howard Coker to claim that Sonoco is “better positioned than ever” to navigate the evolving geopolitical landscape.
The company’s net income is down 16.5 percent year over year, coming in at $54 million in the first quarter of 2025 compared to $65 million during the same period last year.
Positive Growth
Despite the downturn in net income, Sonoco’s first-quarter net sales set a record at $1.7 billion, up 31 percent from $1.3 billion during 2024’s first quarter, a difference of $31 billion. Its adjusted EBITDA increased from $245 million the year before. Sonoco attributes much of its sales growth to acquiring Swiss metal packaging company Eviosys, rebranded as Sonoco Metal Packaging EMEA. The deal was finalized in December 2024, which boosted the first-quarter earnings.
Completing a Critical Sale
During the first quarter, Sunoco completed the $1.8 billion sale of its thermoformed and flexible packaging business to Toppan Holdings Inc. It used the after-tax proceeds of approximately $1.56 billion to reduce debt.
During a recent earnings call, interim CFO Jerry Cheatham said, “This divestiture strengthens our focus on core sustainable packaging platforms and positions us to reinvest in higher return opportunities that drive long-term earnings growth and margin expansion. Looking ahead, our leadership in two core markets will enable us to operate more efficiently and serve our customers with greater focus and agility.”
Net sales in Sonoco’s Consumer Packaging business are up 83 percent, coming in at $1.07 billion compared with $582 million in the first quarter last year, driven by the integration of the new Sonoco Metal Packaging EMEA business as well as year-over-year volume growth in metal packaging in the US.
Positive Outlook Despite Slumping Sales
However, net sales in its industrial paper packaging business are down 6 percent, reaching $558 million in the first quarter of this year compared with $593 million in the first quarter of 2024.
Sonoco attributes the decline to factors such as the negative impact of foreign currency exchange rates and the loss of net sales related to the divestiture of two production facilities in China.
Cheatham said this about the decline: “Obviously, it was around $80-85 dollars in the first quarter. We expect it to be similar in the second, and we’re expecting it to average somewhere between $90 and $95 in the second half of the year.”
Coker reiterated this point and remained positive, saying, “Even with economic uncertainty, we remain confident in our ability to deliver continued growth, margin expansion, and strong cash flow generation, enabling us to drive even greater long-term value for our shareholders.”
