Berry Global Group, Inc. BERY reported fourth-quarter fiscal 2024 (ended September 2024) adjusted earnings of $2.27 per share, which beat the Zacks Consensus Estimate of $2.25. The bottom line decreased 0.9% year over year.

Net sales of $3.16 billion beat the consensus estimate of $3.15 billion. The top line increased 3% year over year, primarily driven by higher selling prices and organic volume growth of 1%.

BERY’s Segmental Discussion

Berry Global announced its plan to go for a tax-free spin-off and merge the majority of its Health, Hygiene and Specialties segment (comprising the global nonwovens and films business) with Glatfelter Corporation. With this announcement and its focus on driving a positive product mix within the Engineered Materials segment into higher value products, BERY renamed the unit Flexibles.

Consumer Packaging - International net sales amounted to $999 million (accounting for 31.5% of total sales), in line with the year-ago quarter’s figure. Our estimate for segmental sales was $977.3 million. Higher selling prices and organic volume growth of 1%, driven by improvement in the industrial markets, have aided the segment’s results. Operating income of $72 million decreased 14% year over year.

Consumer Packaging - North America’s net sales totaled $840 million (accounting for 26.5% of total sales), up 7% year over year due to 3% growth in volumes. Our estimate for segmental sales was $778.7 million. Operating income increased 32% year over year to $124 million.

Net sales from the Health, Hygiene & Specialties segment amounted to $642 million (accounting for 20.3% of total sales), up 2% year over year due to higher selling prices. Our estimate for segmental sales was $642.1 million. It reported an operating income of $11 million, down 69.4% from the year-ago quarter.

Net sales from the Flexibles segment amounted to $687 million (accounting for 21.7% of total sales), which increased 2% year over year. Organic volume grew 1% led by volume growth in North American consumer films and some recovery in European industrial markets along with higher selling prices. Our estimate for segmental sales was $696.0 million. Operating income was $62 million, down 29% year over year.

Berry Global’s Costs & EBITDA

Berry Global’s cost of goods sold increased 3.1% to $2.6 billion. Selling, general and administrative expenses increased 6.1% year over year to $228 million. The company reported operating EBITDA of $546 million, flat year over year. Its operating income decreased 11% to $269 million.

BERY’s Balance Sheet and Cash Flow

At the end of the fourth quarter, Berry Global had cash and cash equivalents of $1.1 million compared with $1.2 billion at the end of fiscal 2023. Current and long-term debt totaled $8.3 billion compared with $9 billion at the end of fiscal 2023.

In fiscal 2024, Berry Global generated net cash of $1.4 billion from operating activities compared with $1.6 billion in the year-ago period. Capital expenditure totaled $551 million compared with $689 million in the prior-year period. The company reported an adjusted free cash flow of $854 million compared with $926 million in the year-ago period.

BERY repurchased 2 million shares for approximately $120 million. It also paid dividends worth $139 million in fiscal 2024.

Berry Global Set to be Acquired by AMCOR

BERY has entered into an agreement to be acquired by Amcor plc (AMCR) for $8.43 billion in an all-stock transaction, strengthening its position in consumer and healthcare packaging markets. Amcor is a global leader in developing and producing responsible packaging for food, beverage, pharmaceutical, medical, home and personal care and other products.

Berry Global shareholders will receive $73.59 per share, a 9.75% premium over its last closing price. The deal highlights ongoing consolidation in the packaging industry, driven by reduced inventory following the pandemic-driven demand surge. Subject to regulatory approvals and customary closing conditions, the acquisition is expected to close in the middle 2025.

BERY’s Fiscal 2025 Guidance

Berry Global expects adjusted earnings to be in the range of $6.10-$6.60 per share in fiscal 2025 (ending September 2025).

BERY expects cash flow from operations to be in the band of $1.125-$1.225 billion. It anticipates free cash flow to be in the $600-$700 million range.

BERY’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Industrial Companies

Avery Dennison Corporation AVY delivered third-quarter adjusted earnings of $2.33 per share, which beat the Zacks Consensus Estimate of $2.32. The bottom line increased 9% year over year, driven by higher volume and productivity gains.

Total revenues grew 4.1% year over year to $2.18 billion and missed the Zacks Consensus Estimate of $2.2 billion.

John Bean Technologies Corporation JBT reported adjusted earnings of $1.50 per share in third-quarter 2024, 35.1% higher than the prior-year quarter. The figure beat the consensus estimate of $1.41.

Revenues of $454 million increased 12.4% from the year-ago quarter. The top line surpassed the consensus estimate of $445 million.

A. O. Smith Corporation’s AOS third-quarter adjusted earnings of 82 cents per share matched the Zacks Consensus Estimate. The bottom line decreased 8.9% on a year-over-year basis.

Net sales of $902.6 million missed the consensus estimate of $913 million. The top line decreased 4% year over year due to lower sales in China and decreased volumes of water heaters in North America.

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