Plastic packaging manufacturer Berry Global (Berry) has reported a net income of $59m in the first quarter (Q1) of financial year 2024 (FY24), down by 44% from $106m in the same period in FY23. 

During the quarter ending 30 December 2023, the company’s net sales also dropped by 6.7% to $2.85bn, from $3.06bn in Q1 FY23. 

This decline in net sales was primarily attributed to lower selling prices and a 3% volume decline, which was slightly offset by favourable foreign currency changes. 

Berry recorded diluted earnings per share (EPS) of $0.50 in Q1 FY24, declining from $0.85 in the prior year’s same quarter.  

The company’s operating income for the latest quarter was $157m, marking a 25% decline from $210m in the same period of FY23. 

This decrease in operating income is largely due to a $20m unfavourable impact from the price cost spread associated with the timing of resin cost pass-throughs and volume decline. 

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However, the company has reaffirmed its FY24 guidance, with adjusted EPS expected to be in the range of $7.35-$7.85 and a cash flow from operations range of $1.35bn-$1.45bn. 

Berry also anticipates free cash flow between $800m and $900m for FY24. 

Berry CEO Kevin Kwilinski said “Berry delivered a solid first-quarter result, in line with our expectations, as our teams executed well despite a challenging macro demand environment. Free cash flow was ahead of last year’s first quarter, putting us on track to deliver against our fiscal 2024 guidance, which we reaffirmed today.

“Our global teams have executed exceptionally well, implementing robust cost reductions and optimising our product mix across our businesses. This strategic focus is helping to counter the challenges of soft market demand caused by inflation on consumers.”  

Meanwhile, Berry agreed to spin-off and merge the majority of its Health, Hygiene & Specialties segment with Glatfelter.  

This transaction values the combined company at $3.6bn on an enterprise value basis. 

The new combined company will operate in the growing speciality materials industry.