U.S. packaging company Sonoco’s third-quarter adjusted net income fell 12.5% to $167 million, or $1.67 per adjusted diluted share, from $191 million a year earlier as higher raw material, freight and energy costs and lower volumes more than offset productivity savings, while drought hurt food-can demand. Net sales declined 4.2% to $2.04 billion. The company recorded a $732 million GAAP net loss, including an $829 million non-cash goodwill impairment charge, compared with net income of $123 million a year earlier.

Drought in parts of Europe and the U.S. reduced crop yields and pressured food-can demand. Seasonal vegetable harvests in EMEA and the Americas reduced metal-can volumes. Consumer Packaging volume and mix fell 3% year over year, while international paper can operations posted double-digit volume growth driven by sustained demand for snack products in emerging markets.

Consumer Packaging reported $1.396 billion in sales, $179 million in operating profit, a 12.8% operating margin and $237 million in adjusted EBITDA. Industrial Paper Packaging sales rose 5.2% to $646 million, helped by pricing actions implemented to help offset rising costs. North American uncoated recycled board trade ton sales increased 10% year over year, mill utilization was 94%, and Industrial volume and mix were modestly positive. Industrial operating profit was $88 million and adjusted EBITDA was $122 million as rising raw material, freight and energy costs more than offset pricing actions and productivity initiatives.

For the fourth quarter, Sonoco expects continued strong Industrial Paper Packaging performance, supported by robust North American uncoated recycled board demand. It anticipates more stable Consumer Packaging performance, driven by continued growth in international paper cans and more balanced aerosol and food-can volumes. Recovering raw material, freight, energy and other operating costs is a priority through the end of 2026 and into 2027. “While our third-quarter performance fell short of our expectations, we are taking targeted actions through our Profitability Performance Plan to further reduce costs, improve productivity and address the impact of inflationary pressures,” said Howard Coker, president and chief executive, in a statement.

Sonoco revised its full-year 2026 guidance to net sales of $7.20 billion to $7.40 billion, adjusted diluted earnings per share of $5.30 to $5.50, adjusted EBITDA of $1.20 billion to $1.25 billion, and operating cash flow of $600 million to $650 million. The cash-flow range includes the effect of payments of prior-year taxes on gains from divestitures and restructuring costs. Full-year 2026 GAAP guidance was not provided because restructuring costs, restructuring-related impairment charges, acquisition and divestiture costs, gains or losses from business sales, and related tax effects could not be forecast reliably without unreasonable effort. Actual results could vary substantially because of economic conditions, tariffs, trade policy, inflation, supply chains, raw material prices, other costs and tax rates.

Sonoco generated $285 million in operating cash flow during the quarter. It reduced total debt by $162 million and net debt by $176 million, drew $500 million from new term-loan facilities to refinance an existing $500 million term loan, and retained $300 million in delayed-draw capacity that it can use within 12 months.