Sonoco Reports Higher Adjusted Earnings, Record Operating Cash Flow in Second Quarter 2026

Sonoco Products Company (NYSE: SON) reported second-quarter 2026 financial results highlighted by improved adjusted earnings, record operating cash flow, strong performance in its Industrial Paper Packaging business and reaffirmed full-year 2026 guidance, despite inflationary cost pressures and lower year-over-year reported net income due to the absence of a large gain from divested businesses recorded in 2025.

The global packaging company generated net sales of $1.885 billion during the quarter, compared with $1.910 billion a year earlier. The decline primarily reflected the November 2025 divestiture of the ThermoSafe business, partially offset by higher pricing to recover inflation- and tariff-related costs and favorable foreign exchange impacts.

GAAP net income attributable to Sonoco was $105 million, or $1.05 per diluted share, compared with $493 million, or $4.96 per diluted share, in the second quarter of 2025. The prior-year period included a $425 million gain from the sale of the Thermoformed and Flexibles Packaging (TFP) and global Trident businesses, making year-over-year comparisons less meaningful.

On an adjusted basis, Sonoco reported adjusted net income of $151 million, up 10.6% from the prior year, while adjusted diluted earnings per share increased 10.2% to $1.51. Adjusted operating profit totaled $242 million, and adjusted EBITDA reached $324 million.

The company also delivered record second-quarter operating cash flow of $301 million and free cash flow of $237 million, driven by disciplined working capital management. Year-to-date operating cash flow included approximately $103 million in one-time tax payments related to gains from the company's 2025 divestitures.

Segment Performance

Consumer Packaging

Consumer Packaging generated net sales of $1.242 billion, up 1.2% year over year, supported by pricing actions and favorable foreign exchange. Segment operating profit declined 5.4% to $152 million, while adjusted EBITDA was $207 million. The company said productivity improvements and disciplined cost management helped offset softer volumes.

Industrial Paper Packaging

Industrial Paper Packaging posted net sales of $643 million, an increase of 4.2%, while segment operating profit rose 4.0% to $89 million. North American uncoated recycled paperboard (URB) trade ton sales increased 6%, boosting mill utilization to 95%, while paper can sales volumes in EMEA/APAC grew 9% due to stronger snack demand. Segment adjusted EBITDA increased to $122 million.

Profitability Supported by Productivity Initiatives

President and Chief Executive Officer Howard Coker said productivity and cost-control initiatives helped offset higher logistics, chemicals, resin and other raw material costs. He noted that the Industrial Paper Packaging segment exceeded expectations, while Consumer Packaging improved sequentially from the first quarter despite softer market demand.

Chief Financial Officer Paul Joachimczyk said the company's businesses continued to demonstrate strong cash-generating capability, reflecting disciplined working capital management and supporting confidence in maintaining full-year guidance.

Balance Sheet and Cash Flow

As of June 28, 2026, Sonoco had $1.3 billion in liquidity, including $169 million in cash and cash equivalents and $1.1 billion of available borrowing capacity under its revolving credit facility. Total debt stood at $4.5 billion, while the company returned $106 million to shareholders through dividends during the first half of 2026. Capital expenditures for the first six months totaled $124 million.

2026 Outlook Reaffirmed

Sonoco reaffirmed its full-year 2026 guidance, maintaining expectations for:

• Net sales: $7.25 billion to $7.75 billion

• Adjusted EBITDA: $1.25 billion to $1.35 billion

• Adjusted EPS: $5.80 to $6.20 per diluted share, with results expected toward the low end of the range

• Operating cash flow: $700 million to $800 million

Looking ahead, the company said it expects stronger demand during the second half of the year, supported by expanding URB markets, customer promotions, new product launches and potential paper can capacity expansion in Europe, Asia and South America, while continuing to focus on productivity improvements and long-term margin expansion.