Shares of Graphic Packaging Holding Co. (NYSE: GPK) plummeted around 5% on October 29, 2024, after the company reported weaker-than-expected third-quarter results and lowered its full-year guidance, citing ongoing challenges in the consumer packaging market.

For the quarter ended September 30, 2024, Graphic Packaging's revenue declined 5.7% year-over-year to $2.22 billion, falling short of analysts' expectations of $2.28 billion. The company's adjusted earnings per share (EPS) came in at $0.64, missing the consensus estimate of $0.68 by a significant margin.

The revenue shortfall was primarily driven by the divestiture of the company's Augusta, Georgia bleached paperboard manufacturing facility earlier in the year, which impacted sales by $109 million. Additionally, lower packaging volumes and pricing pressures weighed on the top line, partially offset by growth in innovation sales.

Michael Doss, Graphic Packaging's President and CEO, acknowledged the challenging environment, stating, "Despite volume challenges brought on first by customer and retailer destocking and later by the pressure consumers are feeling from price inflation, we are delivering margin strength and consistency in line with the best global consumer packaging companies."

Reflecting the weaker-than-anticipated performance, Graphic Packaging slashed its full-year 2024 adjusted EPS guidance to a range of $2.49 to $2.61, down from its previous outlook of $2.65 to $2.85. The company also lowered its adjusted EBITDA forecast to $1.68 billion to $1.72 billion, compared to the earlier range of $1.73 billion to $1.83 billion.

Despite the near-term headwinds, Graphic Packaging highlighted some positive developments during the quarter, including the launch of new paperboard cup and container innovations for major foodservice customers, as well as the introduction of the first-ever round Boardio™ paperboard canister for a leading collagen-protein brand.

While analysts acknowledged the challenging conditions facing the consumer packaging industry, some expressed concerns over the extent of Graphic Packaging's guidance cut, particularly for earnings. However, management remained optimistic about the company's long-term growth prospects, driven by its focus on sustainable packaging innovations and operational excellence initiatives.

As the company navigates the current headwinds, investors will be closely watching for signs of improvement in packaging volumes and pricing, as well as the successful execution of Graphic Packaging's strategic initiatives aimed at driving long-term profitability and shareholder value.