10-Q · April 28, 2026
Sonoco reported Q1 2026 net sales of $1,676,442,000, down $32.8 million (1.9%) versus Q1 2025. GAAP operating profit was $127.1 million (up $0.2% vs $126.9M) while Adjusted Operating Profit declined to $200.8 million…
Earnings analysis · 10-Q
SON earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
Sonoco delivered second-quarter revenue of $1.885 billion, down 1.3% year over year, while GAAP operating profit increased 9.8% to $192.8 million and adjusted EPS rose to $1.51 from $1.37. Segment sales grew in both…
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Sonoco delivered second-quarter revenue of $1.885 billion, down 1.3% year over year, while GAAP operating profit increased 9.8% to $192.8 million and adjusted EPS rose to $1.51 from $1.37. Segment sales grew in both Consumer Packaging and Industrial Paper Packaging, but Consumer Packaging profit and margin declined on softer mix. The principal offset to improved earnings is cash conversion: first-half operating cash flow used $67.3 million, cash declined to $168.6 million, and approximately $968.8 million of debt matures within the next 12 months.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $1.05
What stood out
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Operating profit rises despite lower sales
Second-quarter net sales were $1.885 billion, down 1.3% from $1.910 billion a year earlier, but GAAP operating profit rose 9.8% to $192.8 million. Operating margin expanded to 10.2% from approximately 9.2%, driven by $18.7 million of productivity/procurement savings and lower one-time costs.
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Underlying adjusted EPS improved
GAAP diluted EPS was $1.05 versus $4.96 in the prior-year quarter, with the comparison distorted by $424.5 million of discontinued-operations income from the 2025 TFP divestiture. On an adjusted basis, diluted EPS increased to $1.51 from $1.37.
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Industrial segment posts profitable growth
Industrial Paper Packaging sales increased 4.2% to $643.6 million and operating profit increased 4.0% to $89.4 million. Its operating margin held at 13.9%, supported by productivity savings and favorable North American mill utilization.
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Consumer sales grow despite mixed demand
Consumer Packaging sales increased 1.2% to $1.242 billion, aided by $20.3 million of foreign-exchange benefit and approximately $18.9 million of pricing. Its 12.2% operating margin remained below the prior-year 13.1%, but higher paper-can demand in EMEA/APAC partly offset weaker aerosol-can and sealant-tube demand.
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Deleveraging reduced interest burden
Interest expense fell to $45.5 million from $64.4 million in the quarter, while net interest expense declined to $41.4 million from $60.2 million. Management attributes the reduction to lower average debt after using 2025 divestiture proceeds for repayments.
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Capex discipline supports deleveraging
Capital expenditures were $125.8 million in the first six months, down $61.7 million year over year. Management intends to keep capex at approximately 4% of sales to preserve balance-sheet flexibility and support debt reduction.
What to watch
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Working capital drove larger cash outflow
First-half operating cash flow was an outflow of $67.3 million, versus a $14.7 million outflow a year earlier. Accounts receivable consumed $113.0 million more cash year over year, and management cites higher June daily sales plus longer customer payment terms.
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Liquidity must cover sizable near-term maturities
Cash and cash equivalents fell to $168.6 million at June 28, 2026 from $378.4 million at December 31, 2025. The company has approximately $968.8 million of scheduled debt maturities over the next 12 months, although it also had $1.134 billion of revolver availability.
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Volumes remain under macro pressure
Consolidated revenue declined $25.0 million, or 1.3%, as ThermoSafe's sale reduced sales by $65.7 million and lower volume reduced sales by $22.9 million. Price increases added $37.0 million and foreign exchange added $29.3 million, indicating reported segment growth was not volume-led.
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Consumer margins and mix weakened
Consumer Packaging operating profit fell 5.4% to $151.7 million and margin declined 90 basis points to 12.2%. Softer volume/mix reduced segment sales by $22.1 million, more than offsetting higher paper-can volumes in EMEA/APAC.
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Tariff and geopolitical cost risk persists
While no standalone Item 1A risk-factor update was included, MD&A newly details elevated trade-policy exposure: imported steel and aluminum from most countries are subject to a 50% duty, while imported metal ends face a 25% tariff. Management expects input-cost, energy and logistics inflation to persist through the second half of 2026.
Management's outlook
The 10-Q does not provide quantitative earnings or revenue guidance. Management states it does not expect the current tariff environment or anticipated second-half inflation in inputs, energy and logistics to materially affect near-term financial performance, based on pricing actions and contractual resets.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.