Graphic Packaging Reports Decline in Q2 and First Half of 2025 Financial Performance

Graphic Packaging Holding Company reported a decline in financial performance for the second quarter and first half of 2025, as detailed in its latest 10-Q filing. For the three months ended June 30, 2025, the company generated net sales of $2.204 billion, a decrease of 1% from $2.237 billion in the same period of 2024. The decline in revenue was attributed primarily to the divestiture of the Augusta paperboard manufacturing facility and reduced pricing and volumes in the open market for bleached paperboard. Net income for the quarter was $104 million, down from $190 million a year earlier, resulting in a diluted earnings per share of $0.34 compared to $0.62 in the prior year.

In the first half of 2025, Graphic Packaging's net sales totaled $4.324 billion, reflecting a 4% decrease from $4.496 billion in the first half of 2024. The company cited similar reasons for the decline, including the impact of the Augusta divestiture and unfavorable pricing dynamics. Income from operations for the first six months fell to $414 million, a 31% decrease from $602 million in the same period last year. The company faced increased costs due to inflation in labor and commodities, which further pressured profitability.

Strategically, Graphic Packaging has been active in restructuring its operations, including the closure of its Middletown, Ohio, recycled paperboard manufacturing facility in May 2025, and the ongoing consolidation of production into more efficient locations. The company is also investing in a new recycled paperboard manufacturing facility in Waco, Texas, which is expected to enhance its production capabilities. The company reported capital expenditures of $541 million in the first half of 2025, driven by this project and other operational improvements.

Operationally, the company has realigned its reporting structure into two segments: Americas Paperboard Packaging and International Paperboard Packaging. This change aims to better reflect the performance and resource allocation of its operations. As of June 30, 2025, Graphic Packaging had 296,248,717 shares of common stock outstanding and reported a total debt of $5.392 billion, with a leverage ratio of 3.55 to 1.00, indicating compliance with its debt covenants.

Looking ahead, Graphic Packaging anticipates continued challenges from inflationary pressures and market volatility but remains focused on executing its strategic initiatives, including enhancing its product offerings and expanding its market share. The company is also evaluating the potential impacts of recent legislative changes, including the One Big Beautiful Bill Act, which may affect its tax liabilities and overall financial outlook.