Smurfit Westrock, the world’s largest cardboard box maker, was down nearly 9 per cent in early trading in New York as it cut its full-year core profit forecast on Wednesday.
The company said weak demand in North America was forcing it to implement additional downtime in factories there in the fourth quarter.
The group now expects full-year adjusted core earnings (Ebitda) to rise by between 4 per cent and 8.5 per cent to between $4.9 billion and $5.1 billion, from a previous $5-$5.2 billion range.
“We’re just being prudent around how we see the world shaping up as we get to the end of 2025,” chief financial officer Ken Bowles said, referring to the decision to reduce output, primarily in North America.
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“The demand patterns [in the United States] that we talked about reversing during the year and hoping would come through still don’t seem to be there, particularly confectionery, foods, the retail sector and ecommerce.”
The profit warning came as Smurfit Westrock reported net sales of $8 billion in the third quarter to September 30th, up slightly from the prior year and in line with analyst expectations. The company also generated $1.3 billion in earnings before interest, taxes, depreciation, and amortisation (Ebitda), slightly behind analyst projections though in line with company guidance.
That allowed the group to bounce back from a $150 million loss in the same period last year to report a profit after tax of $245 million.
The company said its performance had been driven by continued operational and commercial improvements in its North American business and its strong positions in EMEA, Asia Pacific (APAC) and Latin America.
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Mr Bowles said the company had turned profitable between 65 per cent and 70 per cent of US loss-making contracts inherited from its $11 billion 2024 acquisition of WestRock, up from 40 per cent at the end of July.
Chief executive Tony Smurfit described the overall results as “resilient” within the context of a “challenging demand environment”. He pointed to weaker box volumes in Europe and softer overall market conditions.
“Our third quarter results reflect the significant progress we have made since the creation of Smurfit Westrock some 16 months ago,” he said. “The steps we have taken, and continue to take, are building a better business and as we end 2025 and enter 2026, we are a much stronger company, increasingly excited about our future prospects.”
“We believe we are one of the market leaders in EMEA and APAC,” he said. “We have once again demonstrated good returns despite a difficult market backdrop to deliver adjusted Ebitda of $419 million with an adjusted Ebitda margin of 14.8 per cent.”
The company generated $579 million in adjusted free cash flow, which was up from $118 million, and the board declared a quarterly dividend of $0.4308 per share, payable in December.
The company was formed in July last year when Smurfit Kappa merged with Atlanta-based rival Westrock and moved its listing to the US. The move effectively doubled the company’s size to more than $30 billion of annual revenues.
The enlarged group expects to deliver synergies at an annual rate of $400 million from the deal by the end of 2025, and a similar scale of operational and commercial improvements. - Additional reporting, Reuters
