Amcor share price slides despite ‘another outstanding year’ of earnings

The Amcor CDI (ASX: AMC) share price is sliding despite the release of the company’s full-year earnings.

After opening 1.3% lower at $18.52, stock in the S&P/ASX 200 Index (ASX: XJO) packaging company has continued to fall. The Amcor share price is currently $18.41, 1.92% lower than its previous close.

Amcor share price slumps on full year earnings

• Reported US$14.5 billion of sales – a 13% increase on that of the prior corresponding period (pcp)
• Income came to US$805 million – a 14% drop
• Earnings per share (EPS) reached 52.9 US cents – down 12% – while adjusted EPS came in 11% higher at 80.5 US cents
• Adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) of US$2.1 billion – a 7% improvement
• Adjusted free cash flow of around US$1 billion
• Revealed 12 US cent quarterly dividend, bringing its full-year dividends to 48 US cents per share

The company also spent US$600 million to repurchase shares last financial year, reducing its issued shares by around 3%.

What else happened in FY22?

The 12 months ended 30 June was a quiet period for Amcor. The company didn’t release any price-sensitive news beyond its quarterly reports in that time. However, the Amcor share price did lift 19% over the period, with most of its gains recorded in the second half.

The company responded to Russia’s invasion of Ukraine by shutting its factory in Ukraine and scaling down its operations at three Russian factories. Today, it announced it will sell said factories. They were previously responsible for between 2% and 4% of its total sales.

What did management say?

Amcor CEO Ron Delia commented on the company’s earnings, saying:

Fiscal 2022 was another outstanding year for Amcor. Our financial performance accelerated throughout the year as we delivered our strongest quarter in June with organic sales growth of 6% and adjusted [earnings before interest and tax] growth of 9%.

This is our third consecutive year of accelerating top line growth, and we expect to sustain this momentum including by stepping up investments in areas such as higher value-add priority segments.

What’s next?

Amcor also provided guidance for financial year 2023.

It expects to report adjusted EPS of around 80 US cents to 84 US cents on a reported basis. That would include approximately 3% to 8% of growth on a comparable constant currency basis, comprising around 5% to 10% growth from underlying business performance and a benefit of approximately 2% from share repurchases, partially offset by a negative impact of around 4% related to higher estimated net interest expense.

It also considers an approximate 2% impact from the scale down and sale of its Russian assets, expected to be completed in the second half, and a negative impact of around 2% related to a stronger US dollar.

Amcor also expects to report approximately US$1 billion to US$1.1 billion of adjusted free cash flow and plans to put around US$400 million towards share repurchases.

Amcor share price snapshot

Today’s dip included, the Amcor share price is still well and truly in the longer-term green.

It has gained 11% since the start of 2022. It’s also currently 8% higher than it was this time last year.

For comparison, the ASX 200 has slumped 6% so far this year and 5% over the last 12 months.

The post Amcor share price slides despite ‘another outstanding year’ of earnings appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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 has positions in and has recommended Amcor Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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