Sonoco cuts earnings outlook to $5.30–$5.50 a share after results miss estimates
Key Facts
Sonoco cut its 2026 adjusted earnings outlook to between $5.30 and $5.50 a share as it reported third-quarter earnings and revenue below analysts' estimates. The company released its results on October 21, 2026, after the market close, amid demand pressures and costs that exceeded its expectations. It had previously set an annual earnings range of $5.80 to $6.20 a share when reporting second-quarter results, saying at the time that it expected to come in near the lower end of that range. Third-quarter adjusted earnings were $1.67 a share, according to Investing.com's report on the quarterly results. That was $0.13 below analysts' estimates of $1.80 a share. Adjusted earnings also fell from $1.92 a share in the third quarter of 2025, according to the company's statement. Quarterly revenue was $2.04 billion, compared with an average forecast of $2.08 billion, according to Investing.com's report.
On a reported accounting basis, Sonoco posted a net loss of $732 million in the third quarter of 2026, according to its financial statement. The results included a non-cash goodwill impairment charge of $829 million. The charge covered the company's consumer packaging businesses in Europe, the Middle East and Africa, as well as in the Asia-Pacific region. It also extended to the Asian industrial businesses, according to Sonoco's details on the units affected by the goodwill impairment. The company generated $285 million in operating cash flow during the same quarter.
Sonoco said sales fell 4.2% year on year in the third quarter, primarily reflecting the sale of its ThermoSafe business. Operationally, the company's price increases were met with weaker sales volumes and product mix. In consumer packaging specifically, volume and sales mix declined 3% from the same quarter a year earlier, according to the earnings statement. The chief executive linked some of the demand pressure to drought in parts of Europe and the United States that damaged crops. He said those conditions "put pressure on demand for food cans," explaining the impact of agricultural conditions on that part of the packaging business. He added that cost inflation exceeded the company's expectations, with higher expenses compounding the challenges it faced in volumes and sales mix.
Industrial packaging sales, meanwhile, rose 5.2% year on year in the third quarter of 2026, according to Sonoco's statement. Segment sales reached $646 million, driven by pricing actions the company took to offset rising costs. Ahead of the earnings release, Wells Fargo cut its price target for the stock on October 19, 2026, according to Investing.com's report. The price target was lowered to $53 a share from $56. Providing context on the stock's performance before the disclosure, Investing.com's report published on October 21 said Sonoco shares had fallen 12.48% over the preceding 3 months.
As part of its revised 2026 outlook, Sonoco set an annual sales range of $7.20 billion to $7.40 billion, according to the earnings statement. It also revised its annual operating cash flow guidance to between $600 million and $650 million. The profitability improvement plan outlined by the company aims to cut costs in response to pressures on its businesses. The plan also includes improving productivity and addressing inflation, according to the objectives Sonoco set out alongside its updated financial outlook. The company scheduled a call to discuss its third-quarter results for October 22, 2026, at 8:00 a.m. Eastern Time.