Amcor (ASX:AMC) share price falls despite reaffirming earnings guidance and US$200m buyback expansion

Amcor's shares are falling on Wednesday…

| More on:
A woman sits on her lounge looking stressed and surprised while reading news on her phone.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Amcor was on form during the first half and delivered sales and profit growth
  • FY 2022 earnings per share and free cash flow guidance has been reaffirmed
  • Amcor has increased its share buyback plans for FY 2022 by US$200 million to US$600 million

The Amcor (ASX: AMC) share price is falling following the release of its half year update.

At the time of writing, the packaging company's shares are down 1.5% to $16.75.

Amcor share price falls despite reporting solid growth

  • Net sales up 12% to US$6,927 million
  • Adjusted earnings before interest and tax (EBIT) up 5% to US$769 million
  • Adjusted earnings per share (EPS) up 9% to 35.8 US cents
  • Quarterly dividend of 12 US cents declared
  • Additional US$200 million share buyback announced, bringing total to US$600 million in FY 2022
  • Full year guidance for adjusted EPS growth of 7% to 11% in constant currency reaffirmed

What happened during the first half?

For the six months ended 31 December, Amcor delivered a 12% increase in sales to US$6,927 million. This reflects Flexibles sales growth of 10% to US$5,347 million and Rigid Packaging sales growth of 17% to US$1,580 million. Management advised that the majority of its sales growth was driven by price increases, which related to the pass through of higher raw material costs.

As for its earnings, Amcor's EBIT rose 5% to US$769 million. This reflects Flexibles EBIT growth of 6% to US$691 million, which offset a 13% decline in Rigid Packaging EBIT to US$117 million. The latter was caused by supply chain disruptions and raw material shortages.

In light of its positive form, management has increased its FY 2022 share buyback by US$200 million to US$600 million. However, it advised that the additional share repurchases are not expected to benefit EPS growth until FY 2023 as there will be no material impact on the weighted average number of shares outstanding in FY 2022.

Management commentary

Amcor's CEO, Ron Delia, was pleased with the company's performance given the challenging operating environment.

He said: "Amcor delivered a solid first half result as our teams continue to successfully navigate a persistently challenging and dynamic operating environment. Across the business we continued to prioritize our customers and our scale and operational agility enabled us to service demand in key segments, driving growth and sales mix improvements."

"At the same time, we implemented a broad range of actions to recover higher input costs and manage through general inflation. As a result, sales grew 12% and we delivered 9 percent adjusted EPS growth year to date. We remain confident in the outlook for fiscal year 2022, enabling us to reaffirm guidance and increase cash returns to shareholders."


Although Mr Delia acknowledges that operating conditions remain volatile, he remains confident on the future.

He said: "While the external environment will continue to evolve, we remain focused on executing our strategy for long-term value creation from the strong foundation established over the last several years. The Amcor investment case has never been stronger and we are increasing investments in premium segments like healthcare and protein, in emerging markets and in our innovation capabilities to drive growth and margin expansion."

The company has reaffirmed its FY 2022 guidance for earnings per share growth in the range of 7% to 11% and adjusted free cash flow of US$1.1 billion to US$1.2 billion.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Amcor Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Earnings Results

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Earnings Results

ASX 200 stock jumps 10% on strong FY24 results

How did this KFC restaurant operator perform in FY 2024?

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock just slashed its final dividend by 23%

This retailer had a tough time during the 12 months. Here's how it performed.

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »