Smurfit Westrock Plc SW reported earnings of 73 cents per share in first-quarter 2025, beating the Zacks Consensus Estimate of 65 cents by a margin of 12%. The bottom line was flat compared with the year-ago quarter.
Smurfit Westrock was formed by the merger of two major paper and packaging industry players, Smurfit Kappa and WestRock, on July 5, 2024. Results for Smurfit Westrock are being reported from the third quarter of 2024 as a unified company. In the current first-quarter 2025 earnings release, the figures for the first quarter of 2024 represent the historical financial results of Smurfit Kappa Group plc, which is being treated as the accounting acquirer in the combination.
Smurfit Westrock PLC Price, Consensus and EPS Surprise
Smurfit Westrock’s net sales in the first quarter of 2025 were reported at $7.7 billion, which lagged the Zacks Consensus Estimate of $7.85 billion. The year-ago quarter’s sales were $2.93 billion.
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
SW Reports Q1 Adjusted EBITDA of $1.25B
The reported cost of sales was $6.08 billion in the first quarter of 2025. In the year-ago quarter, the cost of sales was $2.22 billion. The gross profit surged 122% year over year to $1.58 billion. Gross margin was 20.6% compared with 24.2% in the year-ago quarter.
The adjusted EBITDA was $1.25 billion compared with $0.5 billion in the year-ago quarter. The adjusted EBITDA margin was 16.4% compared with 16.2% in the year-ago quarter.
SW’s Segment Performances in Q1
The company operates under three reportable segments.
Europe, MEA & APAC: This segment includes operations in Europe, the Middle East and Africa, and the Asia Pacific. Sales for the Europe, MEA and APAC segment were $2.6 billion, up 17.7% year over year. The segment’s adjusted EBITDA was up 1% year over year to $389 million.
North America: This segment includes operations in the United States, Canada and Mexico. Sales for the North America segment were $4.7 billion, a significant increase from the year-ago period’s $0.4 billion. The segment’s adjusted EBITDA surged to $785 million from the year-ago quarter’s $59 million.
LATAM: This segment includes operations in Central America and the Caribbean, Argentina, Brazil, Chile, Colombia, Ecuador and Peru. Sales for this segment were $513 million, up 50% year over year. The segment’s adjusted EBITDA skyrocketed 113% year over year to $115 million.
Smurfit Westrock’s Cash Position & Balance Sheet Updates
SW had cash and cash equivalents of $797 million at the end of the first quarter of 2025 compared with $855 million as of the end of 2024.
Net cash provided by operating activities was $235 million compared with $42 million in the year-ago quarter. At the end of Dec. 31, 2024, the adjusted free cash flow was a negative $144 million compared with a negative $130 million in the year-ago quarter. The company announced a quarterly dividend of 43.08 cents per share. It will be paid on June 18, 2025, to shareholders of record at the close of business on May 16, 2025.
SW’s Q2 & FY25 Outlook
Smurfit Westrock stated that its synergy program is on track to deliver $400 million, with approximately $350 million in the current year. The company is optimizing its assets and recently announced the closure of more than 500,000 tons of paper capacity in North America. It is also closing two converting facilities in North America and has initiated the process to close two of its converting facilities in EMEA & APAC.
The company expects to incur additional economic downtime in the second quarter of 2025 with an expected cost of $100 million compared with the first quarter. Smurfit Westrock expects second-quarter 2025 adjusted EBITDA to be $1.2 billion.
For 2025, adjusted EBITDA is projected between $5 billion and $5.2 billion. The company had reported 2024 adjusted EBITDA of $4.7 billion.
Smurfit Westrock Stock’s Price Performance
Shares of the company have declined 18.8% in the past six months compared with the industry’s 12.7% fall.
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SW Stock’s Zacks Rank
The company currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Smurfit Westrock’s Peer Performances
International Paper Company IP reported first-quarter 2025 adjusted earnings of 23 cents per share, missing the Zacks Consensus Estimate of 35 cents. The bottom line improved 35% year over year, driven by the DS Smith acquisition and price increases.
Net sales were $5.9 billion in the quarter under review, up 27.8% from the year-ago quarter. The top line missed the consensus estimate of $6.6 billion.
Packaging Corporation of America PKG reported adjusted earnings per share of $2.31 in the first quarter of 2025, beating the Zacks Consensus Estimate of $2.21. The bottom line increased 34% year over year. The figure was above the company’s guidance of $2.21.
Packaging Corp.’s sales in the first quarter rose 8.2% year over year to $2.141 billion. PKG’s top line surpassed the Zacks Consensus Estimate of $2.140 billion.
A Paper & Related Product Stock Awaiting Results
Rayonier Advanced Materials RYAM is set to release first-quarter 2025 results on May 6. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 14 cents per share. The company incurred a loss of two cents per share in the year-ago quarter.
The consensus estimate for the RYAM’s top line is pegged at $388.6 million, indicating 0.2% growth from the prior-year reported figure. RYAM currently carries a Zacks Rank of 3.
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