Greif Inc Class A (NYSE:GEF) stock rose 13.55% (As on June 5, 11:23:33 AM UTC-4, Source: Google Finance) after the company updated its fiscal year 2025 guidance, lifting the lower end due to a strong performance in the second quarter (Q2) and a more favourable projection for price and cost dynamics compared to earlier forecasts. The company reported an increase in non-generally accepted accounting principles net income and sales for the quarter, with net income of $47.3m, representing a 6.5% increase from the $44.4m reported in the same quarter of the previous year. The Sustainable Fiber Solutions segment saw net sales increase by $19 million to $599.1 million, primarily due to higher containerboard and boxboard prices. However, the Durable Metal Solutions segment experienced a decline, with net sales decreasing by $34.8 million to $378.9 million, mainly due to lower volumes and average selling prices. Greif also reported progress on its cost optimization program, achieving $10 million in run-rate savings by the end of the quarter. The company expects to reach $15-25 million in savings on a run-rate basis by the end of fiscal 2025.
Moreover, Customized Polymer Solutions net sales increased by $43.7 million to $329.3 million primarily due to $38.8 million of contributions from recent acquisitions. Durable Metal Solutions net sales decreased by $34.8 million to $378.9 million primarily due to $18.6 million attributable to lower volumes and $12.3 million attributable to lower average selling prices. Sustainable Fiber Solutions net sales increased by $19.0 million to $599.1 million.
GEF in the second quarter of FY25 has reported the adjusted earnings per share of $1.22, beating the analysts’ estimates for the adjusted earnings per share of $1.12. The company had reported the adjusted revenue growth of 35.9 percent to $1.39 billion in the second quarter of FY25, missing the analysts’ estimates for revenue of $1.42 billion. Adjusted EBITDA increased 26.0% to $213.9 million compared to Adjusted EBITDA of $169.7 million.
Additionally, net cash provided by operating activities increased by $48.9 million to a source of $136.4 million. Adjusted free cash flow increased by $50.6 million to a source of $109.6 million. Total debt of $2,775.2 million decreased by $140.9 million. Net debt decreased by $197.6 million to $2,522.5 million. The leverage ratio decreased to 3.3x from 3.4x in the prior year quarter.
For fiscal year 2025, Greif reiterated its guidance, projecting adjusted EBITDA of $725 million and adjusted free cash flow of $280 million.