Smurfit Westrock, the world's largest cardboard box maker, has today cut its full-year core profit forecast, as weak demand in North America forced it to implement additional downtime in factories there in the fourth quarter.
The Ireland-headquartered company now expects full-year adjusted core earnings (EBITDA) to rise by between 4% and 8.5% to between $4.9 billion and $5.1 billion, from a previous $5 billion to $5.2 billion range.
"We're just being prudent around how we see the world shaping up as we get to the end of 2025," its chief financial officer Ken Bowles told Reuters, referring to the decision to reduce output, primarily in North America.
"The demand patterns (in the United States) that we talked about reversing during the year and hoping would come through still don't seem to be there, particularly confectionery, foods, the retail sector, e-commerce," he said.
Smurfit Westrock reported third-quarter core profit of $1.3 billion, in line with its guidance but below the average $1.32 billion forecast of nine analysts cited by LSEG SmartEstimate.
Bowles said falling US interest rates should in theory give consumers some positivity, but Smurfit was not baking that into its numbers just yet.
Bowles added that the company had turned profitable between 65% and 70% of US loss-making contracts inherited from its $11 billion 2024 acquisition of WestRock, up from 40% at the end of July.
He described a "slightly different" picture in its other main market of Europe, where demand is "bouncing around okay" and it was just a question of when it would improve, particularly in continued laggard Germany.
The EBITDA margin at its European-focused division improved to 14.8% from 13.4% at the end of June, but was still far below a rate of 19% achieved two years ago.
The margin stood at 16.3% across all 40 countries in which it operates, the company added.
The company said today that its third quarter net sales rose to just over $8 billion, up from $7.67 billion in the third quarter of 2024.
Smurfit Westrock today said its Board had approved a quarterly dividend of $0.4308 per share on its ordinary shares.
Tony Smurfit, President and CEO of Smurfit Westrock, said the company's third quarter results reflect the significant progress it has made since the creation of Smurfit Westrock some 16 months ago.
"The steps we have taken, and continue to take, are building a better business and as we end 2025 and enter 2026 we are a much stronger company, increasingly excited about our future prospects," Mr Smurfit said.
Tony Smurfit said the operational and commercial improvement in its North American business is increasingly evident, with an adjusted EBITDA of $810m.
"The North American mill system demonstrated a strong operational performance in the quarter. Our corrugated operations continue to focus on value over volume and exiting uneconomic business," the CEO said.
He said the company in EMEA and APAC once again demonstrated good returns despite a difficult market backdrop to deliver adjusted EBITDA of $419m.
"As a result of our integrated model, our mill system continues to run close to full utilisation. While the backdrop from a paper supply perspective remains challenging, our value-added proposition in our packaging business is reflected in the resilience of our margin despite the softer demand environment," Tony Smurfit said.
Meanwhile, Smurfit Westrock's Latin American operations delivered adjusted EBITDA of $116m for the quarter, reflecting continued operational improvement and its strong market positions.
"The slightly lower margin quarter-on-quarter is primarily a result of a one-time operational issue which has now been resolved. Latin America remains a compelling growth region, both organically and inorganically," the CEO said.
He also said that the year to date has been characterised by a "challenging demand backdrop" and as a result the company expects to take additional economic downtime in the fourth quarter to optimise its system.
"As a result, we now expect to deliver full year adjusted EBITDA in a $4.9 to $5.1 billion range. Our 2026 capital spend is expected to be in a $2.4 to $2.5 billion range. This level of spend allows us to continue optimising our asset base, accelerating cost take-out and capitalising high-growth areas," he added.
