SEE Q4 Results Exceed Projections, CD&R Merger Expected to Finalize by Mid-2026

Sealed Air Corporation Exceeds Q4 2025 Earnings Expectations

Sealed Air Corporation (SEE) posted adjusted earnings per share of $0.77 for the fourth quarter of 2025, outperforming the consensus estimate of $0.72. This result marks a 2.7% increase compared to the same period last year, fueled by improved adjusted EBITDA and reduced operating expenses, which benefited from productivity enhancements and lower interest payments. However, these positives were partially offset by higher depreciation, amortization, and increased tax expenses. When including special items, earnings per share from continuing operations stood at $0.30, compared to a break-even result in the previous quarter.

Q4 Sales Rise Despite Volume Decline

The company generated $1.4 billion in total sales for the quarter, surpassing expectations of $1.34 billion and representing a 2% year-over-year increase. Favorable currency movements contributed a 2.8% boost, while pricing had a slight negative effect of 0.2% and volumes slipped by 0.5%.

Internal projections had anticipated a 1.3% negative impact from pricing, a 1.9% drop in volume, and a 0.3% positive effect from currency translation.

Sealed Air Corporation Price, Consensus, and EPS Surprise

Margins and EBITDA Performance

Cost of sales climbed 3.8% year over year to $1 billion. Gross profit reached $398 million, down 2% from the previous year's $407 million, resulting in a gross margin of 28.4%—a decrease of 120 basis points. Selling, general, and administrative expenses rose 5.3% to $199 million. Adjusted EBITDA improved by 2.7% to $278 million, with the EBITDA margin edging up to 19.8% from 19.7% a year ago.

This margin improvement was attributed to lower operating costs and favorable currency effects, though these were partially offset by weaker net pricing in both the Food and Protective divisions and reduced volumes in Food.

Segment Highlights for Q4

• Food Segment: Net sales increased 1.6% year over year to approximately $937 million, exceeding internal estimates. Pricing had no impact, volumes declined 1.4%, and currency provided a 3% benefit. Adjusted EBITDA for the segment was about $202 million, a 2.7% decrease from the prior year, mainly due to lower volumes and less favorable pricing, partially balanced by reduced operating costs and positive currency effects.
• Protective Segment: Net sales reached $464 million, up 3% from the prior year and above projections. Pricing negatively impacted results by 0.5%, while volumes grew 1.3%. Adjusted EBITDA surged 21% to $80.5 million, driven by lower operating costs, though offset by less favorable pricing.

Cash Flow and Financial Position

Operating cash flow for 2025 totaled approximately $628 million, compared to $728 million in the previous year. As of December 31, 2025, Sealed Air reported total debt of $4.1 billion, down from $4.4 billion a year earlier. The company ended the year with $1.4 billion in available liquidity, including $344 million in cash and $1.06 billion in unused committed credit facilities.

Full-Year 2025 Results

For the full year, Sealed Air achieved adjusted earnings per share of $3.34, a 6% increase year over year and ahead of the consensus estimate of $3.29. This improvement was mainly due to lower interest expenses and higher adjusted EBITDA, partially offset by a greater number of diluted shares and higher depreciation and amortization. Including special items, EPS from continuing operations was $2.99, up from $1.83 in 2024.

Total sales for the year slipped 0.6% to $5.36 billion, but still exceeded expectations. Pricing had no net impact, volumes declined 1.2%, and currency added a 0.6% benefit. Internal forecasts had anticipated a 0.3% negative pricing effect and a 1.6% volume decrease.

Acquisition by Clayton, Dubilier & Rice (CD&R)

In November 2025, Sealed Air entered into a definitive agreement to be acquired by private equity firm Clayton, Dubilier & Rice (CD&R) in an all-cash deal valued at $10.3 billion. CD&R is recognized for its expertise in the industrial and packaging sectors.

Shareholders approved the transaction on February 25, 2026. Under the agreement, each shareholder will receive $42.15 in cash per share. The acquisition is expected to close by mid-2026, pending regulatory approval.

Stock Performance and Analyst Ratings

Over the past year, Sealed Air’s stock price has climbed 35.3%, outperforming the industry’s 1.1% decline.

The company currently holds a Zacks Rank #2 (Buy).

Q4 Results from Industry Peers

• Packaging Corporation of America (PKG): Reported adjusted EPS of $2.32 for Q4 2025, missing expectations and declining 6% year over year. Quarterly sales rose 10.1% to $2.36 billion but fell short of estimates.
• Amcor Plc (AMCR): Posted adjusted EPS of $0.86 for the second quarter of fiscal 2026, beating projections and up 7.5% from the previous year. Revenue soared 68% to $5.45 billion, though this was below consensus forecasts. Gains from the Berry acquisition helped results, but ongoing volume declines weighed on revenue and profit.

Upcoming Earnings: Karat Packaging Inc.

Karat Packaging Inc. (KRT) is scheduled to announce its fourth-quarter 2025 results on March 12. The consensus estimate is $0.28 per share in earnings, indicating a 3.5% decrease year over year. Revenue is projected at $114 million, a 12% increase from the prior-year quarter.

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