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SA

SEALED AIR CORP/DE (SEE)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered stable top-line and margin expansion: revenue $1.335B (-0.8% YoY), Adjusted EBITDA $292.5M (+2.5% YoY), and Adjusted EPS $0.89 (+7% YoY) on productivity savings offsetting pricing and volume headwinds .
  • Results beat Wall Street consensus: revenue $1.335B vs $1.311B*, and Adjusted EPS $0.89 vs $0.72*; management maintained full-year guidance given North America volume softness and evolving trade-policy impacts .
  • Food segment was flat with favorable price and lower volume; Protective volumes stabilized with industrial portfolio inflecting to growth but pricing remained unfavorable .
  • Balance sheet deleveraging continued: Net Debt $3.99B, net leverage 3.6x; CFO transition announced (Kristen Actis‑Grande joining Aug 25) and $0.20 quarterly dividend declared, supporting investor confidence .
  • Catalyst: The combination of an EPS and revenue beat with maintained guidance and signs of Protective volume stabilization may support near-term sentiment; watch Q3 commentary on North America demand and trade-policy impacts for guidance risk .

What Went Well and What Went Wrong

What Went Well

  • “Best volume performance since Q4 2021” with Protective industrial portfolio inflecting to volume growth; management emphasizes “controlling the controllables” via customer focus and transformation execution .
  • Margin expansion: Adjusted EBITDA rose to $292.5M (21.9% of sales) from $285.5M (21.2%); Adjusted EPS up to $0.89 from $0.83, driven by productivity (CTO2Grow) and lower interest expense .
  • Food segment profitability improved: Adjusted EBITDA $210M (23.4% margin) vs $205M (22.9%) YoY on productivity and slightly favorable net price .

What Went Wrong

  • North America volume softness pressured Food volumes (-$13M, -1%); total company volumes down 2% and pricing mixed (Food favorable, Protective unfavorable) .
  • Protective margin compression: Adjusted EBITDA $78M (17.8%) vs $82M (18.1%) YoY on unfavorable net price despite productivity savings .
  • Cash generation weaker YTD: CFO $168.5M vs $313.3M (-46%) and FCF $81.2M vs $207.5M (-61%) due to higher incentive comp and tax payments .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$1.373 $1.273 $1.335
GAAP Diluted EPS – Continuing Ops ($)$0.00 $0.79 $0.64
Adjusted Diluted EPS ($)$0.75 $0.81 $0.89
Adjusted EBITDA ($USD Millions)$270.8 $276.3 $292.5
Adjusted EBITDA Margin (%)19.7% 21.7% 21.9%
SegmentQ2 2025 Net Sales ($USD Millions)YoY Change (%)Price Impact ($)Volume Impact ($)Adjusted EBITDA ($USD Millions)Adjusted EBITDA Margin (%)
Food$896.1 +0.3% +$14.4M -$13.1M $209.9 23.4%
Protective$438.9 -2.7% -$8.0M -$10.3M $78.0 17.8%
KPI (YTD unless noted)Q2 2025Q2 2024
Cash from Operations ($USD Millions)$168.5 $313.3
Capital Expenditure ($USD Millions)$87.3 $105.8
Free Cash Flow ($USD Millions)$81.2 $207.5
Total Debt ($USD Billions)$4.342 $4.404 (Dec 31, 2024 reference)
Cash & Equivalents ($USD Millions)$354.4 $371.8 (Dec 31, 2024 reference)
Net Debt ($USD Billions)$3.988 $4.032 (Dec 31, 2024 reference)
Net Leverage (x)3.6x 3.6x (Dec 31, 2024 reference)
Actuals vs Consensus (Q2 2025)ActualConsensusSurprise
Revenue ($USD Billions)$1.335 $1.311*+$0.024B (beat)
Adjusted EPS ($)$0.89 $0.719*+$0.17 (beat)
# of Estimates—Rev: 13*, EPS: 15*—

Values with asterisks retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025)Current Guidance (Q2 2025)Change
Net Sales ($USD Billions)FY 2025$5.1 to $5.5 $5.1 to $5.5 Maintained (FX improved; NA volume softer)
Adjusted EBITDA ($USD Millions)FY 2025$1,075 to $1,175 $1,075 to $1,175 Maintained
Adjusted EPS ($)FY 2025$2.90 to $3.30 $2.90 to $3.30 Maintained
Free Cash Flow ($USD Millions)FY 2025$350 to $450 $350 to $450 Maintained
Dividend ($/share)Quarterly$0.20 (declared May 29, 2025) [9:— not listed]$0.20 (declared July 16, 2025) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Productivity/CTO2Grow2024 cost take-out $89M; margin support despite Protective pricing pressure Accelerating initiatives to improve operating leverage and offset potential H2 volume weakness Improving execution
Protective turnaroundContinued weakness and price pressure; margin down YoY Volumes stabilized; industrial inflected to growth; pricing still unfavorable Stabilizing with early signs of improvement
Food end-market demandQ4 volumes up across regions; Q1 organic growth with case-ready share gains Flat sales; price favorable; NA volume softness Mixed: price up, NA volume softer
FX/macro/trade policyProvided 2025 outlook ranges; caution on tax/FX Maintaining outlook; improved FX offset by NA volume weakness; monitoring global trade policies Balanced; FX tailwind vs demand headwinds
DeleveragingNet leverage reduced to 3.6x; FCF strong in 2024 Net Debt < $4B; net leverage 3.6x Maintained discipline

Management Commentary

  • CEO: “While our Protective turnaround will be non-linear, this quarter is a mark of progress as we delivered our best volume performance since the fourth quarter of 2021 and our industrial portfolio inflected to volume growth.”
  • CEO: “Market pressures are accelerating, primarily in North America, as the impact of global trade policies weigh on economic growth and consumer spending patterns are beginning to shift.”
  • Interim CFO: “Our second quarter results exceeded our expectations across all metrics… We are accelerating our productivity initiatives to improve operating leverage… We are being prudent and maintaining our full year guidance range.”
  • CFO transition: “Kristen Actis‑Grande will join as Chief Financial Officer, effective August 25, 2025.”

Q&A Highlights

  • The Q2 2025 earnings call transcript could not be retrieved due to a database inconsistency; Q&A highlights are unavailable. Themes likely addressed on the call—Protective volume trajectory, NA demand softness, pricing and productivity offsets, and guidance prudence—are reflected in management’s press release commentary .

Estimates Context

  • SEE beat consensus on both revenue and EPS in Q2 2025; maintained FY guidance despite macro/trade-policy uncertainty and NA volume softness, suggesting estimates may drift modestly upward for EPS while revenue remains cautious pending H2 visibility .
  • Consensus: Revenue $1.311B*, EPS $0.719*, Actuals: Revenue $1.335B , Adjusted EPS $0.89 ; # of estimates: Rev 13*, EPS 15*. Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Beat on both revenue and EPS with margin expansion; productivity savings are holding against price/volume pressure—supportive for near-term sentiment .
  • Protective volumes showed early improvement (industrial inflection) but pricing remains a headwind—focus on price realization trajectory in H2 .
  • Food profitability improved despite NA volume softness; monitor North America end-market trends and potential case-ready share gains durability .
  • Guidance maintained (EPS $2.90–$3.30; EBITDA $1,075–$1,175M; FCF $350–$450M), with FX tailwinds offset by demand risk—near-term setup hinges on Q3 visibility .
  • Deleveraging remains a priority: Net Debt ~$4.0B, net leverage 3.6x; dividend steady at $0.20, CFO transition may accelerate transformation execution .
  • Trading implications: Positive reaction risk skew given the beat and stabilization message; watch for any third-quarter disclosure on trade-policy impacts and NA demand that could challenge maintained guidance .
  • Medium-term thesis: Execution on CTO2Grow to structurally lift margins, Protective mix improvements, and Food innovation (case-ready/fluids) can underpin earnings quality; sustained cash generation is key to deleveraging and equity rerating .