The market may be a sea of red on Wednesday, but that hasn't stopped one ASX 200 stock from charging higher today.
That stock is packaging giant Amcor (ASX: AMC).
In afternoon trade, the company's shares are up 4% to $14.43.
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Why is this ASX 200 stock charging higher?
Investors have been buying Amcor's shares following the release of a third-quarter update which revealed an improved performance.
According to the release, year to date, for the nine months ended 31 March, the ASX 200 stock reported net sales of US$10,105 million. While this is down 8% over the prior corresponding period, it is an improvement on its performance during the first half.
At that point, its sales for the six months ended 31 December were down 9% on the same period last year.
It was an even better improvement for Amcor's net income. It came in at US$710 million year to date in the third quarter. This is a decline of 12% on the prior corresponding period. Whereas during the first half, the ASX 200 stock's net income was down by 17% year on year.
This has been ahead of management's expectations and led to the company lifting its earnings guidance range for FY 2024.
Amcor now expects adjusted earnings per share to be between 68.5 US cents and 71 US cents. This is up from its previous guidance of 67 US cents to 71 US cents per share.
Management continues to expect its adjusted free cash flow to come in at US$850 million to US$950 million for the financial year.
'Third consecutive quarter of improved earnings'
The ASX 200 stock's interim CEO, Peter Konieczny, was pleased with the quarter. He said:
Amcor delivered improved financial results above our guidance for the third quarter driven by outperformance in the underlying business and our third consecutive quarter of improved earnings leverage. As a result, we returned to earnings growth one quarter earlier than expected, raised our adjusted EPS guidance for fiscal 2024 and reaffirmed guidance for adjusted free cash flow.
Konieczny acknowledges that FY 2024 has been tough but remains positive on the future. He adds:
While overall March quarter volumes were lower than last year, our volume performance was better than anticipated and substantially improved on the previous quarter with growth delivered across several categories and geographies. A combination of sequential volume improvement, the realization of benefits from structural cost initiatives and maintaining our focus on flexing the cost base resulted in year over year growth in adjusted EBIT for the quarter.
We expect our momentum will continue to build, including delivering mid single digit adjusted EPS growth in our final quarter of fiscal 2024. We remain confident in our capital allocation framework and strategy for long term growth. We believe our underlying business and market positions are strong and we will continue to invest for organic growth, pursue acquisitions or repurchase shares and return cash to shareholders through a compelling and growing dividend.
