Overview

• US packaging firm's Q2 sales slightly beat analyst expectations, despite a 1.3% yr/yr decline

• Adjusted EPS for Q2 rose 10% yr/yr, beating analyst expectations

• Company reaffirmed full-year 2026 guidance for sales, adjusted EBITDA, adjusted EPS, and cash flow

Outlook

• Sonoco maintains 2026 net sales guidance of $7.25 bln to $7.75 bln

• Company expects 2026 adjusted EPS of $5.80 to $6.20, toward low end of range

• Sonoco projects improved margins as pricing actions and productivity initiatives take effect

Result Drivers

• PRODUCTIVITY AND COST CONTROL - Productivity savings from fixed cost reduction initiatives and procurement savings helped drive operating profit growth, offsetting inflation and higher operating costs

• SEGMENT PERFORMANCE - Industrial Paper Packaging segment results exceeded expectations, driven by productivity gains and a 6% increase in North America URB trade ton sales volume; Consumer Packaging segment benefited from pricing actions and cost management, but overall volumes remained soft

• DIVESTITURE IMPACT - Decline in overall net sales was primarily due to the November 2025 divestiture of the ThermoSafe business

Company press release: ID:nGNX32yhtC

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Sales	Slight Beat*	$1.89 bln	$1.88 bln (10 Analysts)
Q2 Adjusted EPS	Beat	$1.51	$1.48 (10 Analysts)
Q2 EPS		$1.05
Q2 Net Income		$105 mln
Q2 Operating profit		$193 mln

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the paper packaging peer group is "buy"

• Wall Street's median 12-month price target for Sonoco Products Co is $63.22, about 15.6% above its July 21 closing price of $54.71

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

Reuters Recommended Reads

• July 20 - Crown Holdings beats Q2 revenue on beverage can growth, raises FY adjusted diluted EPS guidance

• July 22 - Akzo Nobel beats profit estimates as price rises offset higher raw-material costs

• July 22 - RPM International Q4 sales, adjusted EPS beat estimates

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