Industrial packaging company Greif Inc (NYSE:GEF) reported financial results for its fiscal first quarter of 2026, delivering a mixed performance against Wall Street expectations. The company's adjusted earnings per share fell short of analyst forecasts, while revenue also missed estimates, reflecting a continued challenging demand environment.
Earnings and Revenue Versus Estimates
For the quarter ended December 31, 2025, Greif reported net sales of $994.8 million. This represents a decline from the $1.02 billion reported in the same quarter last year and came in below the analyst consensus estimate of approximately $1.03 billion.
On the bottom line, the company's performance was more nuanced. GAAP net income attributable to Greif surged to $174.6 million, or $3.00 per diluted Class A share, compared to $22.0 million, or $0.13 per share, in the prior-year period. However, this figure was significantly boosted by a $216.2 million pre-tax gain from the sale of its timberlands business. Excluding such one-time items, the company's adjusted net income was $26.6 million, resulting in adjusted earnings per share of $0.48.
- Reported Adjusted EPS: $0.48
- Analyst Estimate for EPS: $0.6646
- Reported Revenue: $994.8 million
- Analyst Estimate for Revenue: $1.033 billion
This adjusted EPS result missed the consensus estimate by a notable margin. The company attributed its operational performance to effective cost management and margin expansion, which helped offset lower sales volumes across its business segments.
Market Reaction and Price Action
The market's initial reaction to the earnings release appears muted to slightly negative, considering the headline misses on both sales and adjusted profit. In the immediate after-market session following the announcement, the stock showed no change in price. Over recent periods, the stock has seen modest gains:
- Last Week Performance: +4.1%
- Last Two Weeks Performance: +3.2%
- Last Month Performance: +4.2%
This suggests that while the quarterly results may have disappointed on specific metrics, investors may be focusing on the company's strategic progress, including significant debt reduction and shareholder returns, which could be providing underlying support for the share price.
Strategic Highlights and Financial Position
Beyond the earnings figures, the press release emphasized several key strategic and financial accomplishments:
- Portfolio Transformation: The quarter reflects Greif's operations following the divestiture of its Containerboard Business to Packaging Corporation of America for $1.8 billion, which closed in August 2025. The company has also realigned its reporting segments, renaming "Integrated Solutions" to "Innovative Closure Solutions."
- Strengthened Balance Sheet: Proceeds from divestitures were used to dramatically reduce debt. Total debt decreased by approximately $1.9 billion to $944.0 million. The company's leverage ratio improved to 1.2x, down from 3.6x in the prior year quarter.
- Shareholder Returns: Greif was active in repurchasing shares, completing about $130 million in buybacks during the quarter. The Board also authorized an additional $300 million for future repurchases.
- Cost Optimization: The company achieved $65 million in run-rate cost savings, progressing toward a total goal of $120 million.
Company Outlook Versus Analyst Expectations
Management reaffirmed its fiscal 2026 "low-end guidance," citing a "multi-year period of industrial contraction" without a clear near-term demand recovery. The guidance includes:
- Adjusted EBITDA: At least $630 million
- Adjusted Free Cash Flow: At least $315 million
This outlook can be compared to broader analyst expectations for the full year. Analysts are currently estimating sales of approximately $4.40 billion for fiscal 2026. For the upcoming second quarter, the consensus estimates are for sales of about $1.16 billion. Greif's decision to maintain only its low-end guidance suggests a cautious stance, aligning with its commentary on persistent market softness.
Segment Performance
The company's results were driven by margin expansion and cost control, as volumes declined across all segments:
- Customized Polymer Solutions: Net sales rose 3.6% to $305.1 million, aided by foreign currency translation, but volumes dipped slightly. Adjusted EBITDA increased 24.6% to $35.5 million.
- Durable Metal Solutions: Sales were essentially flat at $354.8 million, with positive currency impact offsetting lower volumes and pricing. Adjusted EBITDA rose 24.5% to $45.8 million.
- Sustainable Fiber Solutions: Net sales fell 9.3% to $311.9 million, primarily on lower volumes. Adjusted EBITDA increased 24.1% to $36.6 million, driven by lower costs.
- Innovative Closure Solutions: This smallest segment saw sales increase 2.6% to $23.0 million, with Adjusted EBITDA up 15% to $4.6 million.
Conclusion
Greif's first quarter presents a story of strategic execution in a difficult market. While the company missed analyst estimates for revenue and adjusted EPS, it demonstrated strong progress on its balance sheet objectives, returning cash to shareholders, and controlling costs to expand margins. The market's tempered reaction likely balances the earnings miss against these positive structural developments and the company's reaffirmed, albeit cautious, full-year outlook. Investors will be watching for signs of demand improvement to complement Greif's streamlined operations and fortified financial position.
For a detailed look at future earnings estimates and past performance, you can review Greif's earnings data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, nor a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
