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Investing.com -- Smurfit Westrock (NYSE:SW) stock fell 4.5% and International Paper (NYSE:IP) dropped 3.8% on Monday after competitor Mondi warned of challenging conditions persisting through year-end, with quarterly earnings falling below expectations.
The decline came after Mondi shares plunged as much as 16% - their steepest drop in nearly 17 years - following preliminary third quarter underlying EBITDA of €223 million, down from €274 million in the second quarter. Mondi cited "fragile demand-side confidence" and "oversupplied markets" as key factors behind the disappointing results.
The profit warning triggered a broader selloff across the paper and packaging sector, with European companies Billerud, Stora Enso, and UPM-Kymmene also experiencing share price declines of 1.5%, 5%, and 2.5% respectively.
Analysts expect significant downward revisions to consensus estimates. Jefferies analyst Cole Hathorn noted that Mondi’s warning implies fiscal year 2025 EBITDA expectations will be cut by 9%-13%, while Morgan Stanley’s Brian Morgan anticipates a reduction of over 10% to 2025 earnings forecasts.
The company indicated it had proactively extended certain scheduled maintenance shutdowns to mitigate the impact of softer market conditions, and noted that current selling prices are lower than third quarter averages.