Sonoco Lifts Profit as Sales Decline Moderates
Second-quarter operating cash flow reached a record $301 million, reversing the prior quarter’s outflow.
Packaging maker Sonoco Products (SON) returned adjusted earnings to growth in the second quarter as cost savings outweighed lower volume and the effect of a divestiture. Adjusted earnings rose 10.2% from a year earlier to $1.51 a share after falling 13% in the first quarter.
The results marked an improvement from the start of the year. The year-over-year sales decline narrowed to 1.3% from 1.9% in the first quarter, while GAAP operating-profit growth accelerated to 9.8% from roughly flat. Productivity, procurement and fixed-cost savings offset pressure from lower volume and the November 2025 sale of ThermoSafe.
Net sales were $1.885 billion, up 12.5% sequentially and 6.6% from the fourth quarter. Adjusted operating profit climbed to $242 million from $201 million in the first quarter, while adjusted EBITDA rose to $324 million from $277 million. GAAP net income fell 78.7% to $105 million because the year-earlier period included a $425 million divestiture gain; adjusted net income rose 10.6% to $151 million.
Consumer Packaging sales increased 1.2% to $1.242 billion as pricing and favorable currency movements offset a 1.8% decline in volume. Weaker demand for metal aerosol cans and adhesive-and-sealant tubes weighed on the segment, while paper-can volume in Europe, the Middle East, Africa and Asia-Pacific rose 9%. Operating profit fell 5.4% to $152 million, though it improved 22% from the first quarter.
Industrial Paper Packaging provided the stronger profit contribution. Sales rose 4.2% to $643 million and operating profit increased 4% to $89 million, helped by productivity gains. North American uncoated recycled paperboard trade-ton volume grew 6%, lifting mill utilization to 95%, while the segment’s operating margin held at 13.9%.
Cash generation also recovered sharply. Second-quarter operating cash flow rose 56% from a year earlier and free cash flow increased 139% to $237 million, following a $367.9 million operating-cash outflow in the first quarter. First-half operating cash flow remained negative by $67 million, largely reflecting about $103 million of one-time taxes tied to 2025 divestiture gains and seasonal working-capital needs.
Sonoco continues to expect full-year sales of $7.25 billion to $7.75 billion, adjusted EBITDA of $1.25 billion to $1.35 billion, adjusted earnings of $5.80 to $6.20 a share and operating cash flow of $700 million to $800 million. Earnings remain likely to finish near the low end of the range, maintaining the posture introduced after the first quarter.